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Regular version of the site

Article

Interrelation of the economic growth and the level of the public expenditure in the context of Wagner's Law

Public Administration Issues. 2018. No. 6. P. 174-183.
Afanasyev M. P., Shash N.

Th e paper looks into how the law formulated by A. Wagner can be used to stimulate economic growth in a post-crisis period. Th e major principles of the concept of fi scal economy are given. It is mainly focused on identifying regularities in perpetually grow￾ing state spending, which can be explained by increasing the fi scal needs of the state. On the basis of data from 1960 to 2015, this regularity is confi rmed for the G7 countries and Russia. It is shown that state spending goes up mostly due to growing pension pay￾ments. Th e authors present the results of Wagner’s Law testing obtained by researchers based on the analysis of data on both developed and developing countries. It has been discovered that it is impossible to conclude categorically about a positive eff ect of fi scal stimulation on economic growth. Th e main factors which aff ect the effi ciency of the ap￾plied fi scal measures are described. Russia is given as an example, where the growth of state spending due to an increase in fi scal needs has not made it possible to ensure the necessary economic growth rate due to its low effi ciency. Th e authors have found out that the main cause of the continually growing budget spending is a large share of the state presence in the Russian economy. Th is slows down the process of its recovery growth, which does not allow for realizing the existing potential. It has been concluded that state spending effi ciency must be improved, among other things, due to a structural transfor￾mation of state spending in the budgeting system of the RF.