Postprint version. Published in Public Choice, Volume 89, Issue 1, October 1, 1996, pages 1-16. Copyright © 1996 Springer. The original publication is available at http://dx.doi.org/10.1007/BF00114274.
This study examines the influence of public sector unions on the expansion of the public sector. Based on public goods theory, our paper models how unions influence the supply of and demand for public sector activities. On the demand side, public sector unions are special interests which advocate public sector expansion to policy makers; on the supply side, they exert pressure to maintain and expand monopoly powers. Empirical evidence supports the hypothesis that a positive relationship exists between public sector unionism and public spending.