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Political Economy of Trade Openness and Government Size

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  • Ryo Arawatari

Abstract

type="main" xml:id="ecpo12049-abs-0001"> This paper proposes a theoretical model that may provide useful insights into the relationship between trade openness and the size of government, as well as a possible explanation for the results of empirical tests of such a relationship. We develop a Hecksher–Ohlin model with publicly provided goods, where the level of publicly provided goods is determined in a probabilistic voting framework. In this context, we show that the start of trade may increase or decrease government size depending on the capital-labor ratio in each country.

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  • Ryo Arawatari, 2015. "Political Economy of Trade Openness and Government Size," Economics and Politics, Wiley Blackwell, vol. 27(1), pages 28-52, March.
    • Handle: RePEc:bla:ecopol:v:27:y:2015:i:1:p:28-52
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    File URL: http://hdl.handle.net/10.1111/ecpo.2015.27.issue-1
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    Cited by:

    1. Giuranno, Michele G. & Nocco, Antonella, 2020. "Trade tariff, wage gap and public spending," Economic Modelling, Elsevier, vol. 91(C), pages 167-179.
    2. Ma, Yong & Yao, Chi, 2022. "Openness and government size: Revisiting the relationship using a large cross-country panel," International Review of Economics & Finance, Elsevier, vol. 79(C), pages 448-465.
    3. María Franco Chuaire & Carlos Scartascini & Mariano Tommasi, 2017. "State capacity and the quality of policies. Revisiting the relationship between openness and government size," Economics and Politics, Wiley Blackwell, vol. 29(2), pages 133-156, July.
    4. Erkam Sari & Hakan Hotunluoglu, 2021. "Government Size and Openness: Insights Basedon Country Classifications," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 7(1), pages 1-16, June.

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