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The Causes For Increase In Public Expenditure

Increase in public expenditure should be controlled in order to lower the public burden. The classical economists were of the view that the volume of public expenditure should be kept low. Adam Smith, David Recardo, H. Pernell and other economists suggested that the Government must keep the level of public expenditure at the minimum possible level. In their view, the Government is responsible only to maintain peace and social order and it should not spend more than what is necessarily required in the performance of its responsibility towards the nation.

According to H. Pernell, “Every particle of expenditure beyond what necessity absolutely requires for the preservation of social order and for protection against attack is waste and unjust and oppressive imposition on the public.” Thus, very low treatment was given to public expenditure before 20th Century. Increase in public expenditure should be controlled in order to lower the public burden.

The theory based on individualism could not find place in twentieth century. There started abnormal increase in the public expenditure of most of the Government. In most of the countries, popular Government took over the reign and they were entrusted with more responsibilities towards their people and less power. The feeling of being progressive acted as a catalyst to the increase in public expenditure. The increase can be well justified on the following grounds-

  • The Government in most of the countries took charge of the new activities which required increased expenditure.
  • Increasing needs of defence and maintenance of public utilities compelled the Government to spend more.
  • Democracy yoked the Governments with the burden of creating everything of the people.

The Causes Responsible for the increase in Public Expenditure in recent years, more or less are:

  1. Expansion of State Activities
  2. Increase in Population
  3. Increased Expenditure on War
  4. Rise of Democracy
  5. Rise in price level
  6. Welfare States
  7. Economic Planning
  8. Growth of Public Sector
  9. Basic infrastructure
  10. And/or other activities

I think the Government should not increase the public expenditure unnecessarily which will turn into the burden of the people.

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