THE TREASURY AND PUBLIC INVESTMENT: A PERSPECTIVE ON INTER-WAR ECONOMIC MANAGEMENT

This paper examines certain administrative constraints which hampered inter-war governments in their operation of public works policies and reinforced their opposition to even more ambitious Keynesian employment programmes. The stabilizing effectiveness of public investment is assessed, as is central government's ability to promote greater capital expenditure by the local authorities, the principal agencies for public investment. To this end, a special study is made of the large-scale public works programmes proposed by Mosley in 1930 and Lloyd George in 1935. It is concluded that there were cogent administrative and political reasons why such programmes were viewed as inappropriate solutions to unemployment between the wars, apart from the more nominally cited economic-theoretic foundations of orthodox opposition to Keynesian policies.