Topic > Why do governments find it so difficult to control public spending...

Why do governments find it so difficult to control public spending? Since the 1970s the increase in public spending has become a politically relevant issue, with emphasis placed on the difficulties experienced in trying to control it. To answer the question of why governments have difficulty controlling public spending, it is first necessary to examine the reasons for the growth of public spending. There are three approaches that attempt to provide reasons for increasing government spending that I intend to examine, and they are the social system approach, the political system approach, and the government system approach. An evaluation of these approaches should in turn shed light on why governments find it difficult to control increased public spending. Following this approach, which offers a broad view of the problems governments face in controlling public spending, I will consider the post-1979 Conservative government as specifically aiming to control spending upon taking office. According to the social system approach, one of the reasons why growth in government spending can be seen to have occurred is due to Wagner's "law of increasing state activity". Wagner's claim is that as real income per capita increases in particular nations, they will spend a greater percentage of the national product through government. Since Wagner's reasons for increased government spending tend to center on industrialization and its associated effects, it is not surprising to find that he thought that the density of urban life would increase social friction to such an extent that government would been called to manage it. That is, urban living would result in the need for greater protection from the police and other forms of government regulation. Wagner also believed that with the growing industry some investments would require so much capital that the state would have to provide it. He thought there would also be public goods whose provision might not be in an entrepreneur's interest. There are arguments against Wagner's suggestions, the first of these being that it could be argued that greater density would provide opportunities for economies of scale. Therefore, the closeness of people to each other could give rise to personal support networks, decreasing the need for public services. Second, contrary to Wagner's arguments for the provision of public goods by the state, it is possible to show other countries that they do without them or to provide tariffs for users. This shifts the burden from general revenue to those who benefit most directly. Another reason for increased public spending under the social system approach is expressed through Tarschy's “demonstration effect”. He suggests that the advent of television "has led to a greater awareness of the standard of