Has Trade Openness Increased all Portuguese Public Expenditures? A Detailed Time-Series Study
AbstractThis work aims at identifying the public outlays that has been influenced by the growth of Portuguese trade openness since the end of World War II. For the Portuguese reality, it is one of the first attempts to discuss a large set of simultaneously tested control variables. For this purpose, the methodology started from a model that tries to the public expenditures to a system of simultaneous macroeconomic forces and, for testing, it followed the steps associated with cointegration analysis. Using the most convenient techniques, a restrictive set of four expenditures (subsidies, interest payments, other current expenditures, and total public expenditures as a proportion of GDP) was found among the wider set suggested by the Literature. The nature of these expenditures supports the claim that, for the Portuguese case, a particular validity of the compensation hypothesis has been observed. The achieved evidence promotes an important rule: in addition to there being a long-term relation between (some) public expenditures and trade openness, short-term relations may also appear.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Institute of Public Finance in its journal Financial Theory and Practice.
Volume (Year): 31 (2007)
Issue (Month): 3 ()
globalization; economic policy; government expenditure composition;
Find related papers by JEL classification:
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James G. MacKinnon, 1995.
"Numerical Distribution Functions for Unit Root and Cointegration Tests,"
918, Queen's University, Department of Economics.
- MacKinnon, James G, 1996. "Numerical Distribution Functions for Unit Root and Cointegration Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 601-18, Nov.-Dec..
- Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October.
- Ruggie, John Gerard, 1982. "International regimes, transactions, and change: embedded liberalism in the postwar economic order," International Organization, Cambridge University Press, vol. 36(02), pages 379-415, March.
- Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135.
- Hans-Martin Krolzig & David Hendry, 1999.
"Computer Automation of General-to-Specific Model Selection Procedures,"
Computing in Economics and Finance 1999
314, Society for Computational Economics.
- Krolzig, Hans-Martin & Hendry, David F., 2001. "Computer automation of general-to-specific model selection procedures," Journal of Economic Dynamics and Control, Elsevier, vol. 25(6-7), pages 831-866, June.
- Hans-Martin Krolzig, 2000. "Computer Automation of General-to-Specific Model Selection Procedures," Econometric Society World Congress 2000 Contributed Papers 0411, Econometric Society.
- David Hendry & Hans-Martin Krolzig, 2000. "Computer Automation of General-to-Specific Model Selection Procedures," Economics Series Working Papers 3, University of Oxford, Department of Economics.
- Rodrik, Dani, 1996.
"Why do More Open Economies Have Bigger Governments?,"
CEPR Discussion Papers
1388, C.E.P.R. Discussion Papers.
- Dani Rodrik, 1998. "Why Do More Open Economies Have Bigger Governments?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 997-1032, October.
- Dani Rodrik, 1996. "Why Do More Open Economies Have Bigger Governments?," NBER Working Papers 5537, National Bureau of Economic Research, Inc.
- Bretschger, Lucas & Hettich, Frank, 2000.
"Globalisation, capital mobility and tax competition: Theory and evidence for OECD countries,"
07/2000, Ernst Moritz Arndt University of Greifswald, Faculty of Law and Economics.
- Bretschger, Lucas & Hettich, Frank, 2002. "Globalisation, capital mobility and tax competition: theory and evidence for OECD countries," European Journal of Political Economy, Elsevier, vol. 18(4), pages 695-716, November.
- Pantelis Capros & Danièle Meulders, 1997. "Budgetary policy modelling: public expenditures," ULB Institutional Repository 2013/13460, ULB -- Universite Libre de Bruxelles.
- Axel Dreher & Jan-Egbert Sturm & Heinrich Ursprung, 2008.
"The impact of globalization on the composition of government expenditures: Evidence from panel data,"
Springer, vol. 134(3), pages 263-292, March.
- Axel Dreher & Jan-Egbert Sturm & Heinrich W. Ursprung, 2006. "The impact of globalization on the composition of government expenditures: Evidence from panel data," KOF Working papers 06-141, KOF Swiss Economic Institute, ETH Zurich.
- Axel Dreher & Jan-Egbert Sturm & Heinrich Ursprung, 2006. "The Impact of Globalization on the Composition of Government Expenditures: Evidence from Panel Data," CESifo Working Paper Series 1755, CESifo Group Munich.
- George Tridimas, 1992. "Budgetary Deficits and Government Expenditure Growth: Toward a More Accurate Empirical Specification," Public Finance Review, , vol. 20(3), pages 275-297, July.
- Stock, James H & Watson, Mark W, 1993.
"A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems,"
Econometric Society, vol. 61(4), pages 783-820, July.
- Tom Doan, . "SWDOLS: RATS procedure to estimate cointegrating vectors using dynamic OLS," Statistical Software Components RTS00207, Boston College Department of Economics.
- James H. Stock & Mark W. Watson, 1991. "A simple estimator of cointegrating vectors in higher order integrated systems," Working Paper Series, Macroeconomic Issues 91-3, Federal Reserve Bank of Chicago.
- Andersen, Torben M. & Herbertsson, Tryggvi Thor, 2003. "Measuring Globalization," IZA Discussion Papers 817, Institute for the Study of Labor (IZA).
- Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57.
- Óscar Afonso & Álvaro Aguiar, 2004. "Comércio Externo e Crescimento da Economia Portuguesa no Século XX," FEP Working Papers 146, Universidade do Porto, Faculdade de Economia do Porto.
- Axel Dreher & Noel Gaston, 2007.
"Has Globalisation Really had no Effect on Unions?,"
Wiley Blackwell, vol. 60(2), pages 165-186, 05.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
- Rehm, Philipp, 2005. "Citizen support for the Welfare State: Determinants of preferences for income redistribution," Discussion Papers, Research Unit: Institutions, States, Markets SP II 2005-02, Social Science Research Center Berlin (WZB).
- Estela Sáenz Rodríguez & Marcela Sabaté Sort & Mª. Dolores Gadea Rivas, 2011. "¿Condiciona la apertura exterior el tamaño del sector público? Un panorama," Hacienda Pública Española, IEF, vol. 198(3), pages 131-149, September.
- Estela Sáenz & Marcela Sabaté & M. Gadea, 2013. "Trade openness and public expenditure. The Spanish case, 1960–2000," Public Choice, Springer, vol. 154(3), pages 173-195, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martina Fabris).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.