Introduction

Although the composition of the public–private mix is not directly predictable from our analysis, our study does permit us to make some useful comment on that subject – a subject that has long been of interest to economic historians. Our model attempts to predict the level of arrangemental response given some initiating disequilibriums, and the nature of that response makes a marginal contribution to the public–private ratio. However, the ratio is also a product of the initial condition (the legal and political structure as well as the citizens' tastes as they relate to public and private institutions) and the initial mix. If, however, we can combine the prediction of the model with an understanding of the initial conditions, we should at least be able to provide some description of the variations in the ‘mix’ over time.

In the past there has been a concern with temporal changes in the public–private mix; however, the earlier chapters also suggest that there were important regional and sectoral differences in that mix. That is, the public–private mix has not only changed over time but has displayed significant differences in the spatial and sectoral dimensions as well. While the bulk of this chapter will explore this change over time, it appears worthwhile to separate out the other two dimensions in a study of the role of government in the American economy.