Original scientific paper

https://doi.org/10.3326/pse.47.3.1

Education spending, economic development, and the size of government

Mark Millin ; Department of Economics, University of Auckland, Private Bag 92019, Auckland 1142, New Zealand
David Fielding ; Global Development Institute, University of Manchester, Manchester M13 9PL, United Kingdom, and Department of Economics, University of Otago, PO Box 56, Dunedin 9054, New Zealand
Dorian Owen orcid.org/0000-0002-4966-0769 ; Department of Economics, University of Otago, PO Box 56, Dunedin 9054, New Zealand

Abstract

We examine the association between economic development and two measures of public spending on education: the “national effort” (public spending on education as a proportion of GDP) and “budget share” (public spending on education as a proportion of total government spending). Using panel data for a large sample of countries from 1989 to 2015, we compare mean levels of national effort and budget share measures for economically and politically distinct groups of countries. We find that economically more developed (richer) countries are characterised by a higher national effort and a lower budget share than less economically developed countries. This implies that richer countries, on average, have larger public sectors than poorer countries, consistent with Wagner’s law and Baumol’s “cost disease” hypothesis.

Keywords

education spending,Wagner’s law,Baumol’s cost disease,economic development,democracy

Hrčak ID:

307859

URI

https://hrcak.srce.hr/307859

Publication date:

4.9.2023.

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