NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Deadweight Costs and the Size of Government

Gary S. Becker, Casey B. Mulligan

NBER Working Paper No. 6789
Issued in November 1998
NBER Program(s):   PE

We provide a model for analyzing effects of the tax system and spending programs on the determination of government spending and taxpayer welfare and show that tax system or spending program which is suboptimal from a Ramsey point of view can improve taxpayer welfare because the system creates additional political pressure for suppressing the growth of government. Relevant examples include the use of inflation taxes capital taxes, excise taxes, deficit financing, and income taxes with many We also demonstrate the similarity of the political responses to revenue shocks, spending shocks, changes in program efficiency. In a broad sample of countries for the years 1973 - 90, we show that broad-based taxes with fairly flat rate structures -- are associated with larger governments. An analysis of defense spending -- especially wartime spending -- oil shocks, intergovernmental grants, and other flypaper effects suggests that the cause and effect is not from spending to tax structures.

download in pdf format
   (1819 K)

email paper

A non-technical summary of this paper is available in the February 1999 NBER digest.  You can sign up to receive the NBER Digest by email.

This paper is available as PDF (1819 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w6789

Published: Becker, Gary S & Mulligan, Casey B, 2003. "Deadweight Costs and the Size of Government," Journal of Law & Economics, University of Chicago Press, vol. 46(2), pages 293-340, October.

Users who downloaded this paper also downloaded these:
Barro w2588 Government Spending in a Simple Model of Endogenous Growth
Becker Crime and Punishment: An Economic Approach
Becker, Philipson, and Soares w9765 The Quantity and Quality of Life and the Evolution of World Inequality
Becker, Grossman, and Murphy w3322 An Empirical Analysis of Cigarette Addiction
Becker w0042 A Theory of Social Interactions
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us