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What Drives Public Employment in Developing Countries?

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Author Info

  • Rodrik, Dani

Abstract

An excessive level of employment is a frequent complaint made about public-sector governance in developing economies. The explanation typically offered is that governments use public-sector employment as a tool for generating and redistributing rents. This article suggests an alternative hypothesis: relatively safe government jobs represent partial insurance against undiversifiable external risk faced by the domestic economy. I show that countries that are greatly exposed to external risk have higher levels of government employment and have experienced faster rates of growth of government consumption. The basic finding on this (partial) correlation is robust against the hypotheses typically offered. Copyright 2000 by Blackwell Publishing Ltd

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 4 (2000)
Issue (Month): 3 (October)
Pages: 229-43

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Handle: RePEc:bla:rdevec:v:4:y:2000:i:3:p:229-43

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669

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Cited by:
  1. Fernàndez-de-Córdoba, Gonzalo & Pérez, Javier J. & Torres, José L., 2009. "Public and private sector wages interactions in a general equilibrium model," Working Paper Series 1099, European Central Bank.
  2. Kessing, Sebastian G. & Strozzi, Chiara, 2012. "The Regional Distribution of Public Employment: Theory and Evidence," IZA Discussion Papers 6449, Institute for the Study of Labor (IZA).
  3. Arzu Yavuz, 2011. "Productivity and Wage Differentials between Private and Public Sector in the Developing Countries (Gelismekte Olan Ülkelerde Özel ve Kamu Sektöründeki Verimlilik ve Ücret Farklilasmasi)," Working Papers 1103, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  4. KaiA. Konrad & SebastianG. Kessing, 2008. "Time Consistency and Bureaucratic Budget Competition," Economic Journal, Royal Economic Society, vol. 118(525), pages 1-15, 01.
  5. Anna Carolina Saba dos Reis & Eduardo Zilberman, 2013. "On the Optimal Size of Public Employment," Textos para discussão 612, Department of Economics PUC-Rio (Brazil).
  6. Danzer, Natalia, 2013. "Job Satisfaction and Self-Selection into the Public or Private Sector: Evidence from a Natural Experiment," IZA Discussion Papers 7644, Institute for the Study of Labor (IZA).
  7. Martin Rama, 2002. "Mondialisation, inégalités et politiques de l'emploi," Revue d’économie du développement, De Boeck Université, vol. 16(1), pages 43-83.
  8. Eduardo Zilberman & Anna Dos Reis, 2013. "On the Optimal Size of Public Employment," 2013 Meeting Papers 482, Society for Economic Dynamics.
  9. Vlachos, Jonas, 2005. "Does Labour Market Risk Increase the Size of the Public Sector? Evidence from Swedish Municipalities," CEPR Discussion Papers 5091, C.E.P.R. Discussion Papers.

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