Factors Underlying the Growth of Local Government in the 19th Century United States

Abstract

Early in the 19th century local governmentsspent less than either the federal or stategovernments. By the end of the 19thcentury local governments spent more thanthe federal and state governments combined. This growth is obviously related to thegrowth of cities, but cities continued togrow in the 20th century, while the localgovernment share of total governmentexpenditures fell, so the growth of citiescannot be the complete answer. Anexamination of expenditures and revenues intwo cities – Boston and Baltimore –suggests that no one component ofexpenditures was responsible for increasesin total spending. Rather, it appears thatthe primary causal factor was revenuegrowth. Cities rely heavily on propertytaxes, and the increasing value of taxableproperty allowed cities to raise increasingamounts of revenue, leading to increasedgovernment spending.