| Wagner's Law |
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Information AboutWagner's Law |
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Named after German economist Adolph Wagner (1835-1917), Wagner's law states that the development of an industrial economy will be accompanied by an increased share of public expenditure in GNP. Wagner's Law of increasing state activity: ''Continual increase in State expenditure is based on State needs growth because of 3 main reasons:'' - Socio-political (during history takes place an essential expansion of the State social functions: (retirement insurance, natural disaster aid either internal or external, environmental protection programs, etc.); - Economic (scientific and technical advance, consequently, increase of State assignments into the science, technology and various investment projects, etc.); – Historical (the State resorts to government loans for covering contingencies, year after year the sum of government debt and interest amount grow; in other words it is an increase in debt service expenditure). |
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