Leviathan and Federalism in the United States

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Abstract
This article is an empirical examination of the "Leviathan hypothesis" developed by economists Brennan and Buchanan (1980). The hypothesis states that as individuals turn over control of public spending to higher levels of government, the preferences of the politicians, bureaucrats, and special-interest lobbyists who determine fiscal policy at these higher levels of government replace the tastes and preferences of the individual for the amount of spending and taxing. This transfer of control from decentralized to centralized decisionmaking and this replacement of taxing for individual preferences by political-bureaucratic preferences toward spending lead to an expansion of the public sector. Regression analysis shows support for the hypothesis in specific public-service areas.

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