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The Wagner's Law as a mirror picture of market failures?

The main aim of this paper is to present theoretical concept of Wagner's Law of Increasing State Activity (WL) in a broader context of his views on role of the state and subordinating economy to political and military goals of the state. In majority of research works published the area of his political views and influence on economic policy of the state is not presented. It is also important to notice that narrow analysis focused on comparison between economic growth and budgetary or governmental spending may not necessarily lead to concluding whether the WL is confirmed or not in particular countries. Some parts of public expenditure can be invisible and hard to count, like for instant tax exemptions and remissions. In order to demonstrate the complexity of the discussed issues and the ambiguity of conclusions drawn from the available data, this study uses descriptive statistics, which was accompanied by an analysis of less "conventional" literature describing the career and political views of Adolf Wagner, which so far has been largely omitted in studies focusing on attempts to verify actuality of these rather narrowly understood theses formulated over 140 years ago. Analysis of available statistical data and observations from the literature, presented in this paper, due to the increasing number and variety of publications falling within the discussed issue, is incomplete and requires further analysis.

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Keywords: Wagner's Law; economic thought



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