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Empirical evidence based on public expenditure patterns over a 24-year period casts doubt on the existence of Wagner's Law, the displacement effect, and budgetary recentralization in Taiwan, while supporting the Beck hypothesis of declining real public sector size, the concentration effect, and decentralized centralization. As is true of existing studies on other developing countries, higher profit rates were found in joint public/private enterprises than in wholly owned public firms. However, public enterprises in Taiwan, unlike those in most developing countries, consistently contributed to rather than drained from public revenue. As a result of this and of their relatively large contribution to capital formation, public enterprises played an important role in Taiwan's impressive economic growth record. eof the few existing time series studies of public expendi-tures in developing countries, most have focused on nations of

For the past two decades, economists, political scientists, and other public policy analysts have repeatedly lamented the lack of attention afforded the expenditure side of fiscal policy. Such concern has prompted numerous studies which have examined in great detail budgets of individual countries. Despite this renewed interest, surprisingly little has appeared in the area of comparative expenditure development. Cross‐country comparisons have traditionally employed cross‐section analyses while ignoring, except in rare instances, comparisons of time series data.

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