Question

what are the causes for the rise in public expenditure?​

Answer 1

HEY MATE HERE IS YOUR ANSWER:-

Some of the main causes of public expenditure growth are:-

1. Income elasticity and increase in per capita income.

2. Welfare state Ideology and Wagner's Law.

3. Effects of war and the need of defence.

HOPE THIS HELPS YOU MATE AND PLEASE MARK ME AS BRAINLY

Answer 2

Public expenditure refers to spending by central and/or local government on various public services and utilities such as education,health sector,transportation facilities,poverty alleviation,infrastructural development and so on.

Explanation:

Major causes behind rise of public expenditure:-

1. Increase in country size and population:As the geographical boundaries and population size of the country expands,the government expenditure will increase consequently.The government has to spend more on public resources to cover the extra population such as food,medical services,educational facilities,transportation services and so forth.Expansion of geographical boundaries will also raise the maintenance cost of the extra land.
2. Expenditure on defense:With increasing threats of war and diplomatic attrition,the government expenditure on defense equipment such as ammunition,weapons,military resources will automatically increase thereby raising overall public expenditure.
3. Overall economic development:To ensure and maintain overall economic development,consistent public spending or expenditure is required on infrastructure,domestic resources,public facilities,public goods and overall socio-economic welfare of the country.
4. Prevention of recessionary impact:To prevent or restrict any impending threat of recession or economic downturn,the government can increase expenditure level to stimulate the economy.The government might spend more to generate more businesses in the economy and enhance the production level of goods and services and induce more consumer demand to maintain long term profitability of businesses and companies.