At the Public Sector Economics virtual presentation on November 9, 2023, Mark Millin, from the Department of Economics at the University of Auckland, gave a lecture on education spending, economic development, and the size of government.

The article published in the journal examines the association between economic development and two national-level measures of public spending on education: the “national effort” and “budget share”. The study emanates from a simple research question: do richer countries spend more than poorer countries for both measures? The empirical findings reveal interesting patterns of association which, by implication, support Wagner’s law and Baumol’s ‘cost disease’ hypothesis. 

Authors formulated their findings as a set of testable propositions, which could be applied to other areas of public financing to see whether the empirical patterns are peculiar to education spending. 

They concluded that from the perspective of public policy analysis, future research might focus on testing the inequality propositions identified in this study with respect to other components of the government’s budget allocation (e.g., the national effort and budget share of health, military, or welfare spending).

The presentation was moderated by Šime Smolić, from the Faculty of Economics, University of Zagreb. A recording and a presentation of this interesting lecture are also available.