Abstract

Buchanan highlighted the inconsistencies that arise when public services are financed by general taxation. Citizens increase their demand for services, even though citizens are reticent to increase taxation. Buchanan invited readers to explore the impact of different assumptions of politicians’ behaviour. In this chapter, attention focuses on the way that vote maximising governments are likely to respond to the divorce between receipt and payment for services. Buchanan illustrated his analysis with reference to the National Health Service in the UK. Predictions are tested with reference to the pattern of excess demand in the National Health Service between 1970 and 2012.