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Trade openness and government size

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  • Benarroch, Michael
  • Pandey, Manish

Abstract

We examine whether trade openness influences government size. Using panel data, we find no evidence of a positive relationship. Rather, causality tests show that larger government size leads to lower openness, the opposite of what Rodrik [Rodrik, Dani, 1998, Why do more open economies have bigger governments? Journal of Political Economy 106, 997-1032.] hypothesized.

Suggested Citation

  • Benarroch, Michael & Pandey, Manish, 2008. "Trade openness and government size," Economics Letters, Elsevier, vol. 101(3), pages 157-159, December.
    • Handle: RePEc:eee:ecolet:v:101:y:2008:i:3:p:157-159
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    References listed on IDEAS

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    1. Tom Krebs & Pravin Krishna & William Maloney, 2010. "Trade Policy, Income Risk, and Welfare," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 467-481, August.
    2. 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.
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    6. Muhammad Islam, 2004. "The long run relationship between openness and government size: evidence from bounds test," Applied Economics, Taylor & Francis Journals, vol. 36(9), pages 995-1000.
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