The Growth of Public Expenditure in the United Kingdom [1 ed.] 1032822015, 9781032822013

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NATIONAL BUREAU OF ECONOMIC RESEARCH NUMBER 72,

GENERAL SERIES

The Growth of Public Expenditure in the United Kingdom BY

ALAN T. PEACOCK AND

JACK WISEMAN ASSISTED BY jINDRICH VEVERKA

A STUDY BY THE NATIONAL BUREAU OF ECONOMIC RESEARCH

1961 PUBLISHED BY PRINCETON UNIVERSITY PRESS, PRINCETON

·1

Copyright© 1961 by National Bureau of Economic Research, Inc. London: Oxford University Press ALL RIGI-ITS RESERVED

L.C. CARD: 61-7409

Printed in the United States of America

NATIONAL BUREAU OF ECONOMIC RESEARCH 1961 OFFICERS

Harold M. Groves, Chairman Arthur F. Burns, President Albert J. Hettinger, Jr., Vice-President Murray Shields, Treasurer Solomon Fabricant, Director of Research Geoffrey H. Moore, Associate Director of Research Hal B. Lary, Associate Director of Research William J. Carson, Executive Director DIRECTORS AT LARGE

Wallace J. Campbell, Nationwide Insurance Solomon Fabricant, New Tork University Marion B. Folsom, Eastman Kodak Company Crawford H. Greenewalt, E. I. du Pont de Nemours Is Company Gabriel Hauge, Manufacturers Trust Company A. J. Hayes, International Association of Machinists Albert J. Hettinger, Jr., Lazard Freres and Company H. W. Laidler, League for Industrial Democracy George B. Roberts, Larchmont, New York Harry Scherman, Book-of-the-Month Club Boris Shishkin, American Federation of Labor and Congress of Industrial Organizations George Soule, South Kent, Connecticut Joseph H. Willits, Armonk, New York Leo Wolman, Columbia University Donald B. Woodward, Richardson-Merrell Inc. Theodore 0. Yntema, Ford Motor Company DIRECTORS BY UNIVERSITY APPOINTMENT

V. W. Bladen, Toronto Arthur F. Burns, Columbia Lester V. Chandler, Princeton Melvin G. de Chazeau, Cornell Frank W. Fetter, Northwestern Harold M. Groves, Wisconsin

Gottfried Haberler, Harvard Walter W. Heller, Minnesota Maurice W. Lee, North Carolina Lloyd G. Reynolds, Yale Theodore W. Schultz, Chicago Willis]. Winn, Pennsylvania

DIRECTORS BY APPOINTMENT OF OTHER ORGANIZATIONS

Percival F. Brundage, American Institute of Certified Public Accountants Harold G. Halcrow, American Farm Economic Association Theodore V. Houser, Committee for Economic Development S. H. Ruttenberg, American Federation of Labor and Congress of Industrial Organizations Murray Shields, American Management Association Willard L. Throp, American Economic Association W. Allen Wallis, American Statistical Association Harold F. Williamson, Economic History Association DIRECTORS EMERITI

Oswald W. Knauth, Beaufort, South Carolina Shepard Morgan, Norfolk, Connecticut N. I. Stone, New York Ci!)! RESEARCH STAFF

Moses Abramovitz Gary S. Becker William H. Brown, Jr. Gerhard Bry Arthur F. Burns Phillip Cagan Joseph W. Conard Frank G. Dickinson James S. Earley Richard A. Easterlin Solomon Fabricant Milton Friedman

Raymond W. Goldsmith Millard Hastay Daniel M. Holland Thor Hultgren F. Thomas Juster C. Harry Kahn John W. Kendrick Simon Kuznets Hal B. Lary Robert E. Lipsey Ruth P. Mack Jacob Mincer

Ilse Mintz Geoffrey H. Moore Roger F. Murray Ralph L. Nelson G. Warren Nutter Richard T. Selden Lawrence H. Seltzer Robert P. Shay George J. Stigler Norman B. Ture Leo Wolman Herbert B. Woolley

The study on which this volume is based was financed in part by a grant to the National Bureau of Economic Research by the Ford Foundation, to which grateful acknowledgment is made. The Ford Foundation is not, however, responsible for any of the statements made or views expressed in the report.

RELATION OF THE DIRECTORS TO THE WORK AND PUBLICATIONS OF THE NATIONAL BUREAU OF ECONOMIC RESEARCH

l. The object of the National Bureau of Economic Research is to ascertain and to present to the public important economic facts and their interpretation in a scientific and impartial manner. The Board of Directors is charged with the responsibility of ensuring that the work of the National Bureau is carried on in strict conformity with this object. 2. To this end the Board of Directors shall appoint one or more Directors of Research. 3. The Director or Directors of Research shall submit to the members of the Board, or to its Executive Committee, for their formal adoption, all specific proposals concerning researches to be instituted. 4. No report shall be published until the Director or Directors of Research shall have submitted to the Board a summary drawing attention to the character of the data and their utilization in the report, the nature and treatment of the problems involved, the main conclusions, and such other information as in their opinion would serve to determine the suitability of the report for publication in accordance with the principles of the National Bureau. 5. A copy of any manuscript proposed for publication shall also be submitted to each member of the Board. For each manuscript to be so submitted a special committee shall be appointed by the President, or at his designation by the Executive Director, consisting of three Directors selected as nearly as may be one from each general division of the Board. The names of the special manuscript committee shall be stated to each Director when the summary and report described in paragraph (4) are sent to him. It shall be the duty of each member of the committee to read the manuscript. If each member of the special committee signifies his approval within thirty days, the manuscript may be publishe-d. If each member of the special committee has not signified his approval within thirty days of the transmittal of the report and manuscript, the Director of Research shall then notify each member of the Board, requesting approval or disapproval of publication, and thirty ao en z

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National

Debt

290.9 289.7 281.2 228.4 208.2 206.7 205.7 209.4 212.5

507 550 609 638 637 707

stration

and Other

46.4 46.3 45.1 44.3 45.5 48.2 50.2 54.8 60.6

175 168 167 173 179 182

Year

1930 1931 1932 1933 1934 1935 1936 1937 1938

1950 1951 1952 1953 1954 1955

Admini-

79 87 96 105 110 115

31.9 31.8 30.8 30.9 31.9 34.0 35.9 37.2 38.7

Order

Law and

179 85 77 73 72 80

1.4 1.2 1.3 1.7 1.2 1.2 1.5 1.6 3.0

(continued)

836 1,293 1,641 1,725 1,706 1,606

I 19.2 115.4 110.4 112.4 118.9 140.8 183.0 254.7 473.2

Defense

Military

FUNCTION

Overseas Services

TABLE A-15 (continued)

2,094 2,234 2,438 2,588 2,611 2,739

484.7 516.8 511.1 497.2 498.3 519.2 532.7 554.4 596.3

Social Services

572 681 629 609 518 531

132.4 130.7 116.6 111.8 117.1 125.5 132.5 141.6 151.4

Economic Services

All

1,144.8 1,173.5 1,138.0 1,066.0 1,060.9 1,117.4 1,186.8 1,303.5 1,587.0 4,539 5,208 5,777 6,048 5,976 6,143 97 110 120 137 143 183

Services

37.9 41.6 41.5 39.3 39.8 41.8 45.3 49.7 51.3

Environmental Services

0,

..... 0:,

and Other

12.1 10.4 5.9 8.1 8.1 6.9 2.8 1.8 1.3

4.5 4.9 5.0 5.1 5.0 4.6 4.5 4.3 4.5 4.3

Year

1890 1895 1900 1905 1910 1913 1915 1917 1918

1920 1921 1922 1923 1924 1925 1926 1927 1928 1929

stration

Admini-

20.4 21.5 25.4 29.4 29.7 28.4 28.0 27.9 27.9 27.5

18.2 14.5 7.0 IO.I 7.4 6.1 6.0 12.2 10.9

Law and Order

Overseas Services

Military Defense

Social Services

2.1 2.6 2.8 2.9 2.9 2.8 2.7 2.8 2.8 2.8

.8 .7

1.4

6.9 5.4 3.5 4.8 4.7 5.7

(continued)

.2 .3 .2 .4 .3 .I .I .I .I .2

.3 .5 .4 .6 .4 .4 .2 .2 .I 32.6 18.9 14.3 13.2 12.7 12.5 12.1 11.8 11.4 11.2

26.7 27.5 48.0 26.1 27.3 29.9 74.8 74.1 80.6 25.9 34.3 35.9 35.0 35.5 36.3 38.4 39.4 39.7 39.6

20.9 25.3 18.0 28.3 32.8 33.0 9.7 8.4 4.7

PERCENTAGE OF TOTAL GOVERNMENT EXPENDITURE

National Debt

TABLE A-15 (continued)

3.8 4.7 4.3 5.7 5.3 5.0 1.3 .8 .6 1.6 2.0 2.4 2.9 3.0 3.0 2.9 2.9 2.9 3.0

12.8 15.4 13.9 I 1.2 10.9 12.3 11.3 10.8 10.7 11.4

mental Services

Environ-

11.0 11.7 13.0 16.3 13.9 12.9 3.7 1.6 I.I

Services

Economic

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4.1 3.9 4.0 4.2 4.3 4.3 4.2 4.2 3.8

3.9 3.2 2.9 2.9 3.0 3.0

1930 1931 1932 1933 1934 1935 1936 1937 1938

1950 1951 1952 1953 1954 1955

,.,

and Other

Year

stration

Admini-

11.2 10.6 10.5 10.5 10.7 11.5

25.4 24.7 24.7 21.4 19.6 18.5 I 7.3 16.1 13.4

Law and Order Overseas Services Defense

Military

1.7 1.7 1.7 1.7 1.8 1.9

2.8 2.7 2.7 2.9 3.0 3.0 3.0 2.9 2.4 3.9 1.6 1.3 1.2 1.2 1.3

.2

.I .I .I .I

.2

.I .I .I

18.5 24.8 28.4 28.5 28.5 26.1

10.4 9.8 9.7 10.5 11.2 12.6 15.4 19.5 29.8

PER CENT OF TOTAL GOVERNMENT EXPENDITURE

National Debt

TABLE A-15 (concluded)

46.1 42.9 42.2 42.8 43.7 44.6

42.3 44.0 44.9 46.6 47.0 46.5 44.9 42.5 37.6

Social Service-s

8.7 8.6

JO.I

12.6 13.1 10.9

10.2 10.5 11.0 11.2 11.2 10.9 9.5

II.I

11.6

Economic Services

2.1 2.1 2.1 2.3 2.4 3.0

3.3 3.5 3.6 3.7 3.8 3.7 3.8 3.8 3.2

Environmental Services

~

._

TABLE A-16

Administration

0.4 0.4 0.4 0.4 0.5 0.5 0.6 0.6 0.7

1.6 1.6 1.3 1.2 I.I I.I I.I I.I I.I 1.0

Year

1890 1895 1900 1905 1910 1913 1915 1917 1918

1920 1921 1922 1923 1924 1925 1926 1927 1928 1929

7.4 7.0 6.7 6.7 6.8 6.8 6.9 6.8 6.7 6.7

0.6 0.6 0.5 0.6 0.5 0.4 1.2 4.0 5.7

National Debt

0.8 0.9 0.8 0.7 0.7 0.7 0.7 0.7 0.7 0.7

0.2 0.2 0.2 0.3 0:3 0.4 0.3 0.3 0.3

Order

Law and

-

0.1 0.1 0.1 0.1 0.1

0.1

11.9 6.1 3.8 3.0 2.9 3.0 2.9 2.9 2. 7 2.7

3.3 1.5 1.7 2.0 15.5 24.1 42.0

I.I

1.0

Military

(continued)

Overseas Services

(pounds per head)

9.5 8.0 8.1 8.6 9.4 9.6 9.5 9.6

II.I

9.4

0.8 1.0 1.2 1.6 2.0 2.2 2.0 2.7 2.4

Services

Social

4.6 5.0 3.7 2.6 2.5 2.9 2.8 2.6 2.6 2.8

0.4 0.5 0.9 0.9 0.8 0.9 0.8 0.5 0.6

Economic Services

0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7

0.1 0.2 0.3 0.3 0.3 0.3 0.3 0.3 0.3

36.4 32.5 26.6 23.0 22.9 23.8 24.5 24.4 24.0 24.2

3.5 4.0 6.8 5.6 6.1 6.7 20.7 32.5 52.1

All Services

1890-1955

Environmental Services

TOTAL GoVERNMENT EXPENDITURE BY FUNCTION, PER HEAD OF POPULATION, AT CURRENT PRICES, SELECTED YEARS,

eg

....

Administration

1.1 1.0 1.0 1.0 1.0 1.0 1.1 1.2 1.3

3.5 3.3 3.3 3.4 3.5 3.6

Year

1930 1931 1932 1933 1934 1935 1936 1937 1938

1950 1951 1952 1953 1954 1955

IO.I 11.0 12.1 12.6 12.6 13.9

4.5

JJ-...

6.3 6.3 6.1 4.9 4.5 4.4 4.4

National Debt

1.6 1.7 1.9 2.1 2.2 2.2

0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.8

Law and Order

1.6

1.4

3.6 1.7 1.5 1.5

0.1

-

Overseas Services

16.7 25.7 32.5 34.1 33.6 31.5

2.6 2.5 2.4 2.4 2.5 3.0 3.9 5.4 9.9

Military

TABLE A-16 (concluded)

41.7 44.5 48.3 51.1 51.4 53.4

10.6 11.2 11.0 10.7 10.7 11.1 11.3 I 1.7 12.5

Social Services

11.4 13.6 12.5 12.0 10.2 10.4

2.9 2.9 2.5 2.4 2.5 2.7 2.8 3.0 3.2

Economic Services

1.9 2.2 2.4 2.7 2.8 3.6

0.8 0.9 0.9 0.8 0.8 0.9 1.0 I.I I. I

Services

Environmental

90.5 103.7 114.5 119.5 117.7 120.5

25.0 25.5 24.6 22.9 22.7 23.8 25.2 27.6 33.4

All Services·

....