Limitations and Application of Wagner's Law

Abstract

As a conclusion derived from empirical analyses,Wagner's Law has forecasted properly that the amount of government's public expenditure would rise with economic development.However,Wagner's Law has been given a fierce attack theoretically and practically because of the continuous evolution of public administration,especially the beginning and expanding of New Public Management around the world whose main content includes optimization to government's function,government reform of the personnel system,public services reformation,reforms of administrative decentralization and the reform of social security system.However,as an integral part of New Public Management Movement all over the world,fiscal reformation of China is deeply affected by Wagner's Law at present.In order to improve the system of government revenue and expenditure,the transfer payment system,system of centralized collection,public budget system and finance supervise system,it is coming to reflect the applicability to public finance in China of Wagner's Law.