Abstract
A government’s role, as it relates to taxation and public spending, has never gone unquestioned. Controversy arises from conservatives advocating fiscal responsibility and limited government intervention in a market economy. This supports the notion that taxes should be levied at the lowest possible level, specifically designated for the financing of the few public goods that only government can provide. However, there are advocates supporting an expanded role for government and arguing in favor of higher taxes to finance more public goods. They also argue for a social protection system of redistributive schemes that, to some extent, will correct the stark inequities in our society. Public provisioning of goods and services and redistribution policy can be defined according to different criteria, some of which have real economic significance while others are matters of convention and convenience. In general, `public spending can be wise or foolish, appropriate or inappropriate, effective or ineffective but—the paradox first pointed out by Keynes—it cannot be more costly to the economy as a whole than doing nothing’ (Nell, 1988, p. 228).
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Similar content being viewed by others
References
Afonso, A., W. Ebert, L. Schuknecht and M. Thone (2005) ‘Quality of Public Finances and Growth,’ Working Paper 438 (Germany: European Central Bank).
Bowles, S. and H. Gintis (1982) The Crisis of Liberal Democratic Capitalism: The Case of the United States,’ Politics and Society 11: 51–93.
European Commission (2004) Public Finance Report, Brussels.
Hare, P.G. (1988) ‘Economics of Publicly Provided Private Goods and Services,’ in Surveys in Public Sector Economics (United Kingdom: Basil Blackwell Ltd.), pp. 68–101.
Nell, E. (1988) Prosperity and Public Spending (Boston: Unwin Hyman), p. 228.
OECD (2005) Annex Table 25. General government total outlays. OECD Economic Outlook 77 (Paris: OECD).
Persson, T. and G. Tabellini (2001) ‘Political Institutions and Policy Outcomes: What are the Stylized Facts?’, mimeo.
Reich, R.B. (1991) ‘Secession of the Successful’, New York Times Magazine (January 20): 16–23. Reprinted at http://www.-personal.umich.edu/-gmarkus/secession.html.
Rodrik, D. (2000) ‘Institutions for High-Quality Growth: What they are and How to Acquire them,’ Working Paper 7540 (Cambridge, MA: National Bureau of Economic Research).
Samuelson, P.A. (1966a) ‘The Pure Theory of Public Expenditure,’ reprinted in J. Steiglitz (ed.) The Collected Scientific Papers of Paul Samuelson, Vol. 2 (Cambridge, MA: The MIT Press), pp. 1223–5.
Samuelson, P.A. (1966b) ‘Diagrammatic Exposition of a Theory of Public Expenditure,’ reprinted in J. Stiglitz (ed.) The Collected Scientific Papers of Paul Samuelson, Vol. 2 (Cambridge, MA: The MIT Press), pp. 1226–32.
Sapir, A. (2005) ‘Globalisation and the Reform of European Social Models,’ Policy Brief, 1 (Brussels: Bruegel).
Shaikh, A. and E.A. Tonak (1994) Measuring the Wealth of Nations (New York: Cambridge University Press).
Shaikh, A. and E.A. Tonak (1987) ‘The Welfare State and the Myth of the Social Wage,’ in R. Cherry et al. (eds), The Imperiled Economy, Book I (New York: Union for Radical Political Economics).
Summers, L.H. (2003) ‘Comment,’ in James J. Heckman and Alan B. Krueger, Inequality in America (Cambridge, MA: The MIT Press), pp. 69–70, 285.
Tanzi, V. and H. Davoodi (1997) ‘Corruption, Public Investment, and Growth,’ Working Paper 139 (Washington, DC: International Monetary Fund).
Tanzi, V. and L. Schuknecht (2003) ‘Public Finances and Economic Growth in European Countries,’ in Fostering Economic Growth in Europe, conference volume of the 31st Economics Conference of the Oestereichische Nationalbank, Vienna, 2003, pp. 178–196.
Tanzi, V. and L. Schuknecht (2000) Public Spending in the 20th Century (London: Cambridge University Press).
Tanzi, V. and L. Schuknecht (1997) ‘Reconsidering the Fiscal Role of Government: The International Perspective,’ American Economic Review, 87 (2), 164–68.
Tanzi, V. and L. Schuknecht (1996) ‘Reforming Government in Industrial Countries,’ Finance and Development (September) 2–5.
Tanzi, V. and L. Schuknecht (1995) The Growth of Government and the Reform of the State in Industrial Countries,’ Working Paper 130 (Washington, DC: International Monetary Fund).
Editor information
Editors and Affiliations
Copyright information
© 2006 Dimitri B. Papadimitriou
About this chapter
Cite this chapter
Papadimitriou, D.B. (2006). Government Effects on the Distribution of Income: An Overview. In: Papadimitriou, D.B. (eds) The Distributional Effects of Government Spending and Taxation. Palgrave Macmillan, London. https://doi.org/10.1057/9780230378605_1
Download citation
DOI: https://doi.org/10.1057/9780230378605_1
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-54528-5
Online ISBN: 978-0-230-37860-5
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)