Is There Any Race to the Top of Productive Government Expenditures? Evidence from OECD Countries (1970-1997)
AbstractThis paper evaluates whether there has been any convergence in government expenditures. The results obtained, by means of the Tukey box-plot, sigma-convergence and conditional beta-convergence, reveal that there is a growing fiscal interdependence among OECD countries. I argue that there is strong evidence of a Òrace to the topÓ of government productive expenditures among OECD countries during the period 1970-1997. The econometric analysis shows that aggregate OECD productive expenditures have pressured countries to increase their own levels of productive expenditures, which might be indicating a competition to attract FDI. In contrast, there is no evidence of convergence in non-productive government expenditures.
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Bibliographic InfoArticle provided by European Political Economy Infrastructure Consortium in its journal European Political Economy Review.
Volume (Year): 3 (2005-2006)
Issue (Month): Winter ()
Composition of government expenditure; convergence; economic integration; OECD;
Find related papers by JEL classification:
- F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
- P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
- P45 - Economic Systems - - Other Economic Systems - - - International Linkages
- P44 - Economic Systems - - Other Economic Systems - - - National Income, Product, and Expenditure; Money; Inflation
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