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The growth of government, trust in government, and evidence on their coevolution

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  • Steven Gordon

    (University of Kentucky)

  • John Garen

    (University of Kentucky)

  • J. R. Clark

    (The University of Tennessee at Chattanooga)

Abstract

The coevolution of trust in government alongside the growth of government is an aspect of research on the latter topic that has not been explored. We consider this coevolution in the context of a political economy model and a public interest view of government growth and incorporate the role of trust in government. The negative association of the growth in government with trust in government is consistent with a political economy model of government growth, rent seeking/lobbying, trust, and productivity. Though such a model is broadly consistent with the historical data since the late 1950s, we present a more econometrically sophisticated examination of the data. In particular, we recognize the difficulties of statistical inference with non-stationary data and take the appropriate steps to deal with it. There is evidence that two aspects of government size – transfer payments and regulatory activity – align with the political economy model. Specifically, we find cointegration indicating the following: a negative association between trust and lobbying activity, a negative relationship between trust and each of these two measures of government, and a positive association of trust and productivity. However, other measures of government size do not produce as robust of findings. Also, we do not find evidence of positive associations of trust and government size nor of trust and lobbying, as might be expected from a public interest view of government.

Suggested Citation

  • Steven Gordon & John Garen & J. R. Clark, 2019. "The growth of government, trust in government, and evidence on their coevolution," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 43(3), pages 456-480, July.
    • Handle: RePEc:spr:jecfin:v:43:y:2019:i:3:d:10.1007_s12197-018-9453-y
    DOI: 10.1007/s12197-018-9453-y
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    Cited by:

    1. Eduardo de Sá Fortes Leitão Rodrigues, 2021. "Citizens' Confidence in Government and Inefficient Public Spending. Is there a Trust Trap?," Working Papers REM 2021/0199, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.

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    More about this item

    Keywords

    H1; H3; H5; H6;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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