The Welfare State, Public Investment, and Growth

1. Front Matter

   Pages II-XIII

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2. The Welfare State

   1. Front Matter

      Pages 1-1

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   2. The Fiscal Crises in Welfare Democracies: With Some Implications for Public Investment

      • James M. Buchanan

      Pages 3-16

   3. Comments on James M. Buchanan “The Fiscal Crisis in Welfare Democracies”

      • Richard A. Musgrave

      Pages 17-22

   4. Social Security and Economic Growth—Implications for East Asia

      • Frederick Zu-Liu Hu

      Pages 23-38

3. Public Investment and Economic Growth

   1. Front Matter

      Pages 39-39

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   2. Corruption, Public Investment, and Growth

      • Vito Tanzi, Hamid Davoodi

      Pages 41-60

   3. Modelling Government Investment and Economic Growth: A Review and Some New Evidence

      • Jan-Egbert Sturm, Jakob De Haan, Gerard H. Kuper

      Pages 61-83

   4. Tax Evasion as a Disciplinary Mechanism for Fiscal Policy

      • Thomas I. Renström

      Pages 85-111

4. Inter-Governmental Relations

   1. Front Matter

      Pages 113-113

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   2. Public Investment Issues and Efficient Climate Change Policy

      • Peter Bohm

      Pages 115-127

   3. Decentralized Government and Macroeconomic Control

      • Paul Bernd Spahn

      Pages 129-149

   4. Foreign Direct Investment : Rules Versus Discretion

      • Alan A. Tait

      Pages 151-165

5. Tax Competition and Foreign Direct Investment

   1. Front Matter

      Pages 167-167

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   2. Foreign Direct Investment and Tax Competition in Southeast Asia

      • Shinemay Chen, Jorge Martinez-Vazquez, Sally Wallace

      Pages 169-197

   3. Investment Distinctions: The Effect of Taxes on Foreign Direct Investment in the U.S.

      • Deborah L. Swenson

      Pages 199-217

6. Foreign Investment in Transitional Economies

   1. Front Matter

      Pages 219-219

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   2. Investment Crisis in Post-Soviet Russia

      • Vladimir I. Tikhomirov

      Pages 221-254

   3. The Infrastructure Development and Foreign Direct Investment in China

      • Zhang Xiaoqiang

      Pages 255-266

7. Intergovernmental Transfer Systems

   1. Front Matter

      Pages 267-267

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This book presents fifteen papers selected from the papers read at the 53rd Congress of the International Institute of Public Finance held at Kyoto, Japan, in August 1997. Although organized under the general title of Public Finance and Public Investment, the Congress covered a wide range of topics in Public Finance. One of the highlights of the Congress was a historic and brilliant debate between two of the greatest living authorities in the area of public finance, Professors James M. Buchanan and Richard A. Musgrave, on the nature of the welfare state and its future. Part I of this book is concerned with this debate and its empirical counterpart. James M. Buchanan (Chapter 1) warns that the welfare state will be unsustainable unless it preserves generality or at least quasi generality in welfare programs. The introduction of overt discrimination in welfare programs through means testing and targeting can only diminish public support. He argues that a political version of the "tragedy of commons" will emerge if and when identifiable interest groups recognize the prospects of particularized gains as promised by discriminatory tax or transfer payments. Faced with mounting pressure from entitlement-like claims of special interest groups against public revenues on one hand and equally strong pressure against further tax burdens on the other, political leaders are attracted to solutions that single out the most vulnerable targets. Distributional disagreement among classes will then become a major source of political discourse and an impetus for class conflict.

• Finance
• Investment
• fiscal policy
• public finance
• tax competition

• College of Policy Science, Ritsumeikan University, Kita-ku, Kyoto 603, Japan

  Hirofumi Shibata

• Department of Economics, The University of Tokyo, Bunkyo-ku, Tokyo 113, Japan

  Toshihiro Ihori

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