The Political Economy of Government Size

We contribute to the political economy of public sector growth by integrating the analysis of three factors: (i) the 'demand' for government, stemming from attempts to coercively redistribute as well as from the ordinary demand for public services, often analyzed in a median voter framework; (ii) the 'supply' of taxable activities emphasized in Leviathan and other models of taxation; and (iii) the distribution of 'political influence' when influence and economic welfare are distinct. The first two factors have been considered in recent empirical papers by Ferris and West (1996) and Kau and Rubin (2002). The role of unequal influence has been investigated empirically by Mueller and Stratmann (2003). We combine all three elements in a spatial voting framework, and use the comparative static properties of the integrative model to shed light on the theoretical and empirical literature