THE PRIVATE SECTOR IMPACT OF STATE AND LOCAL GOVERNMENT: HAS MORE BECOME BAD? Academic Article uri icon

abstract

  • Early research suggests some increases in state and local government spending more than offset the negative effects of the tax increases needed to fund them. More recent research finds the growth of state and local government generally discourages private sector growth. Using panel data on private employment, capital and output for the 48 contiguous states, the authors find that government size influences whether additional government helps or hinders private sector growth. The rapid growth of state and local government in the late 1980s likely outstripped the willingness to pay. With government growth moderating in the 1990s, however, the private sector response has become more favorable. (JEL H3, H4, R5). © Western Economic Association International 2006.

author list (cited authors)

  • TAYLOR, L. L., & BROWN, S.

citation count

  • 14

complete list of authors

  • TAYLOR, LORI L||BROWN, STEPHEN PA

publication date

  • October 2006

publisher