Federal legislative activism in Australia: a new approach to testing Wagner’s law

This paper considers the relationship between government growth and real GDP per capita by developing models of federal legislative output in Australia since 1901. Growth in legislation is found to be negatively related to growth in real income per capita in the short-run, implying that legislation responds to temporary economic shocks, but without a robust long-run relationship with the level of income. The growth in the number of pages of legislation enacted and legislative complexity also show a negative short-run relationship with growth in real national income per capita and a positive long-run relationship with the level of income.