Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/190840 
Year of Publication: 
2014
Citation: 
[Journal:] Journal of European Social Policy [ISSN:] 1461-7269 [Volume:] 24 [Issue:] 1 [Publisher:] Sage Publications [Place:] Thousand Oaks, CA [Year:] 2014 [Pages:] 56-79
Publisher: 
Sage Publications, Thousand Oaks, CA
Abstract: 
One of the enduring conclusions of political economy is that the government’s share of the economy tends to grow over time and with a rising gross domestic product (GDP) per capita. Yet, from the late 1980s through to 2008, government spending as a percentage of GDP declined in the typical year in affluent democracies. Synthesizing and building on literatures on the welfare state, state size and neoliberalism, we evaluate three explanations for the expansion and retrenchment of government spending as a percentage of GDP. We estimate fixed effects models of three measures of changes and cuts in government spending. In the full sample 1971–2008, changes and cuts were driven by the structural pressures of unemployment and trade openness, and the institutional factor of the adoption of the Euro. However, this conceals important historical variation. In the earlier period of expansion, the power resource of unionization was the most robust influence. In the later period of retrenchment, changes and cuts were shaped by the adoption of the Euro and a set of structural pressures. In contrast to previous research, changes and cuts in government spending are not associated with a country’s GDP per capita after the mid-1980s. We conclude by discussing implications for the welfare state and neoliberalism, and by encouraging caution for universal theories of state size.
Subjects: 
neoliberalism
government spending
political economy
retrenchment
welfare state
Persistent Identifier of the first edition: 
Additional Information: 
Dieser Beitrag ist mit Zustimmung des Rechteinhabers aufgrund einer (DFG-geförderten) Allianz- bzw. Nationallizenz frei zugänglich / This publication is with permission of the rights owner freely accessible due to an Alliance licence and a national licence (funded by the DFG, German Research Foundation).
Document Type: 
Article
Document Version: 
Published Version

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