Economic Development and Government Spending: An Exploration of Wagner’s Hypothesis during Fifty Years of Growth in East Asia

Applicability of Wagner’s hypothesis to six East Asian countries is studied for a period of nearly a half-century during which their economic growth has often been termed as a “miracle”. Despite the high rates of growth in most cases, there is little indication to support the hypothesis except for Japan and possibly Korea. This finding is broadly supported by a variety of tests of cointegration using time-series as well as panel data.