The article discusses how governments decide on spending and taxes to achieve economic, social, and political goals. Public expenditure includes spending by the government, local authorities, and nationalized industries. The level of public spending should balance benefits with the cost of taxes. Different theories help determine the right amount of spending. Trends in spending over time and across countries can be tricky to interpret due to statistical and definitional issues. Wagner's law and the displacement effect are important observations on the growth of public spending. The reasons for increased public spending are economic, social, and political.