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CHAPTER 9 The Growth of Government In the course of the past century government expenditures, including transfer payments, in developed democracies grew from at most a sixth to generally over two-fifths of national income. We believe the standard economic explanations for this growth are inadequate. That belief is shared by others such as Holsey and Borcherding (1997). The standard explanation views public activity as income redistribution to the politically powerful. In this context the poor are regarded as politically powerful, in the sense that the rich do not have the votes to protect their dollars. Anything, then, that would increase the political power of the poor would increase the size of government's redistributive activity. Kristov, Lindert, and McClelland (1992) reason that some economic development frees lower-income classes to devote political effort for redistribution to themselves. While this increased power of the poor could well be part of the story, we do not believe it is the whole story. We offer an alternative theory ofthe growth ofgovernment, one that leads to different testable implications than does the standard theory. Our theory passes those tests. Our own explanation for the growth of government is simple. "Goodness" increases the role of government, and virtually all the variables that reduce goodness have declined over time, and those that increase goodness have increased over time. Community involvement has been on the decline, and on the decline in a way particularly conducive to the growth of political goodness. Increasing mobility reduces the cost of goodness, which is the cost of friendship lost by offending others who do not share this desire to be "good." Starting over, one can specialize in friends who also want to be good. This process is important for college students, particularly those who live away from home, and there has been a huge increase in college education in the world. College students would tend to be "good" whether or not they were indoctrinated by their teachers. Chapter 8 showed college education making people more liberal on eleven issues 167 168 Signaling Goodness and more conservative on six. However, these conservative positions have a quite different intertemporal effect than the liberal positions. The conservative positions occur because those with college education associate with high-income groups. This association is a function of one's education relative to others rather than one's level of education per se. In contrast, the liberalizing tendencies ofa college education are a function of that level of education. Therefore, an increase in the level of education will increase votes for greater government activity. The growth in urbanization and the increase in commuting time for the general population increase the growth of government. It is harder to be an active member of the community as it becomes denser in population . Community involvement is also reduced by a significant difference between one's work and residential location. Both reduce the costs of being politically "good." Indirect Democracy In the United States the growth in goodness has generated a sea change in the effect of assorted institutions on government expenditures. Historically , indirect democracy was considered a bulwark against mobocracy. Hamilton reasoned that if we "[g]ive all the power to the many they will oppress the few" (in Madison 1989) and the few should be protected by an upper house chosen by special electors to serve for life. The U.S. Constitution was constructed in part to reduce the redistributional role of government by appointing, rather than electing, the Senate and the Supreme Court. It was the populists-those in favor of the poor-that were the driving force in the movement to convert appointed offices to elected offices. Part of the rationale behind this belief in the conservatism of appointed offices is still correct. Appointed officials are less constrained by voter preferences than elected officials (Tabarrok and Helland 1999), especially where their terms of office are longer (Elder 1987). But it was also assumed that the preferences of appointed officials would be more conservative than voter preferences. Officials tend to come from higher-income classes than voters in general. Class loyalty would, then, generate more conservative preferences for officials compared to voters. But, this careful statecraft on the part of conservatives and liberals alike did not reckon with the growth of goodness. Many of those working as appointed government officials will be "do-gooders." In the last chapter we found evidence that, in part, lawyers choose their occupation to be "good." We found similar [18.219.236...

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