Abstract
Despite an attempt by its own authors, it is difficult to argue that the influential model of the size of government developed by Meltzer and Richard (1981) has had convincing empirical backing. In this paper, we adapt that model to a model of state government size. The main testable hypothesis is that as income inequality grows, government size (as measured by the percentage of income devoted to government redistribution) grows. We test the model using panel data from the US states from 1979–1991. In contrast to the results found by Meltzer and Richard (1983), we find little evidence to support the model. The results are robust to several model specifications and estimation techniques.
Similar content being viewed by others
References
Abrams, B.A. and Dougan, W.R. (1986). The effects of constitutional restraints on government spending. Public Choice 49: 101–116.
Abrams, B.A. and Lewis, K. (1987). A median-voter model of economic regulation. Public Choice 52: 125–142.
Alm, J. and Evers, M. (1991). The item veto and state government expenditures. Public Choice 49: 101–116.
Bergstrom, T.; Blume, L. and Varian, H. (1986). On the private provision of public goods. Journal of Public Economics 29: 25–49.
Besley, T. and Case, A. (1995). Incumbent behavior: Vote-seeking, tax-setting, and yardstick competition. American Economic Review 85: 24–45.
Case, A.; Rosen, H. and Hines, J. (1993). Budget spillovers and fiscal policy interdependence. Journal of Public Economics 52: 285–307.
Clarke, G.R.G. (1995). How can we explain declining state aid to the aged poor? Manuscript. University of Rochester.
Epple, D. and Romer, T. (1991). Mobility and redistribution. Journal of Political Economy 99: 828–858.
Gilligan, T.W. and Matsusaka, J.G. (1994). Deviations from constituent interest: The role of legislative structure and political parties in the states. Working paper. University of Southern California.
Hochman, H. and Rodgers, J. (1969). Pareto optimal redistribution. American Economic Review 59: 542–557.
Masia, N. (1995). Essays on the political economy of government spending. Ph.D. Dissertation. University of Rochester.
Matsusaka, J.G. (1992). Economics of direct legislation. Quarterly Journal of Economics 107: 541–571.
Meltzer, A. and Richard, S. (1981). A rational theory of the size of government. Journal of Political Economy 89: 914–927.
Meltzer, A. and Richard, S. (1983). Test of a rational theory of the size of government. Public Choice 41: 403–418.
Mueller, D.C. (1989). Public Choice II. Cambridge, UK: University Press.
Orr, L. (1976). Income transfers as a public good: An application to AFDC. American Economic Review 66: 359–371.
Peltzman, S. (1980). The growth of government. The Journal of Law and Economics 23: 209–289.
Roberts, K.W.S. (1977). Voting over income tax schedules. Journal of Public Economics 8: 329–340.
Romer, T. (1975). Individual welfare, majority voting, and the properties of a linear income tax. Journal of Public Economics 4: 163–186.
Tullock, G. (1983). Comment. Public Choice 41: 819–822.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Gouveia, M., Masia, N.A. Does the median voter model explain the size of government?: Evidence from the states. Public Choice 97, 159–177 (1998). https://doi.org/10.1023/A:1004973610506
Issue Date:
DOI: https://doi.org/10.1023/A:1004973610506