When Government Wastefulness is Publically Preferred: Applying Relationship Theory to People’s Appraisal of Government Stimulus Spending
Date of Award
Economics, Stimulus, Government spending
In chapter 10.6 of the General Theory, John Maynard Keynes addressed the idea that the general public finds some forms of government spending more palatable than others even if the forms they find more palatable are in fact known to be more wasteful. Keynes suggests that there is a tendency to analyze such spending on buildings and bridges through a business proposition lens, but spending on something like defense is exempted from such cost-efficient scrutiny because no one expects military spending to be a wise business proposition in the first place. Thus the public accepts wastefulness when it comes to fighter jets, but not solar power. I distill Keynes’s idea about the public’s acceptance of waste into experimental form to show that participants actually favor wastefulness. I test this notion by adopting a mental model in which government spending is evaluated on market norms and one in which social norms prevail. This type of model is an adaptation of relationship theory used in the field psychology. Using experimental survey data from undergraduate college students, this paper tests the notion that the acceptability of government spending projects is influenced by the type of relationship domain to which participants mentally assign that particular spending project. In other words, government spending that looks like a business project faces harsher scrutiny than government spending that does not look like a business project.
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Stiffler, Christopher E., "When Government Wastefulness is Publically Preferred: Applying Relationship Theory to People’s Appraisal of Government Stimulus Spending" (2013). Restricted Access ETDs. 96.
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Christopher E. Stiffler