lead both the growth in government and contraction in government depending upon (1) the character of the change in economic output and (2) the social context within which such change occurs. Neiman points out also that a strong motivation for government growth frequently is a troubled economy that demands either or both an economic stimulus and/or social protection for displaced workers and families. During the rapid growth of the last-half of the 1990s, however, MIT's Technology Review called for increased government spending on technology to assure a continuation of high economic growth, low inflation, and low unemployment. Thus, complexity exists not only in the causes in the growth of government but also among persons and groups who advocate either reductions or increases in the size of government.
Neiman used total government spending as a proportion of gross domestic product (GDP) as a measure of the size of government. The factor that contributes most to the size of government in this context is social spending for services such as health care, employment protection, support for the poor, and so forth. The "welfare state" is the term frequently used to describe the provisions of such services by government. An examination of the development of the welfare state across comparable nations, therefore, provides a convenient way to assess the links between economic growth and growth in government.
Growth in Government Across Comparable Nations: Providing Social Services
The welfare state refers to the interaction of various social orders and institutions. The basic social orders are community, market, state, and associations. Each has its own guiding principles, predominant actors and resources, principal motives, and pay-offs for society. The social institutions normally associated with these four social orders are households, private firms, public agencies, and voluntary associations or nonprofit organizations,...