PUBLIC EXPENDITURE AND ECONOMIC GROWTH: SOME THEORETICAL REFLECTIONS

Students of the subject say that the theory of public expenditure is still in its infancy. I take this to mean, among other things, that the science of public finance has not yet established useful generalizations about the size and character of public expenditure in various countries at various times. If this is so, it should bo no surprise that the theory is still an infant. Public expenditure is intimately connected with the size and role of government in society, and any theory or theories that we might develope must consider the interaction between government, the economy, and social and political institutions. Because of this, and because of the inevitable differences between the historical experiences of different countries, we should never expect to develop anything more than broad generalizations which, together with the detailed institutional and historical knowledge of different countries, permit us to "take a view" , of the phenomenon\of public expenditure. I do not foresee the time when we will have a- theory which, gives us actual predictive power for the future course of public outlay in any country.