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A regional analysis of openness and government size

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  • Frank Balle
  • Ashish Vaidya
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    Abstract

    The effects of international trade have been studied primarily from the perspective of a nation, often overlooking the more direct effects that occur on a regional or state level. Studies have illustrated the relationship between international trade and openness to the size of a nation's government as well as to specific categories of government spending. Because the United States retains strong state governments it is important to correlate openness with government size at the state level. The purpose of this paper is to ascertain whether increased state openness has resulted in state governments responding to the increased international trade activity by offering greater social protection. It is found that both public welfare and health services expenditures are positively correlated with the level of a state's openness. This suggests that US states have had to respond to the adverse effects of increased international trade activity.

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    File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/13504850110067450&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

    Volume (Year): 9 (2002)
    Issue (Month): 5 ()
    Pages: 289-292

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    Handle: RePEc:taf:apeclt:v:9:y:2002:i:5:p:289-292

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    Cited by:
    1. Kueh, Jerome Swee-Hui & Puah, Chin-Hong & Wong, Chiew-Meu, 2008. "Bounds Estimation for Trade Openness and Government Expenditure Nexus of ASEAN-4 Countries," MPRA Paper 12351, University Library of Munich, Germany.
    2. Gemmell, Norman & Kneller, Richard & Sanz, Ismael, 2008. "Foreign investment, international trade and the size and structure of public expenditures," European Journal of Political Economy, Elsevier, vol. 24(1), pages 151-171, March.
    3. Daehaeng Kim & Chul-In Lee, 2007. "Government Size and Intersectoral Income Fluctuation," IMF Working Papers 07/93, International Monetary Fund.
    4. 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.
    5. 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.

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