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Trade openness and government size

  • Benarroch, Michael
  • Pandey, Manish

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.

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File URL: http://www.sciencedirect.com/science/article/B6V84-4SX9FVM-1/2/ec79d41b2012c3855a66af498e1f95cb
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 101 (2008)
Issue (Month): 3 (December)
Pages: 157-159

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Handle: RePEc:eee:ecolet:v:101:y:2008:i:3:p:157-159
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Krebs, tom & Krishna, Pravin & Maloney, William, 2005. "Trade policy, income risk, and welfare," Policy Research Working Paper Series 3622, The World Bank.
  2. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  3. Dani Rodrik, 1996. "Why Do More Open Economies Have Bigger Governments?," NBER Working Papers 5537, National Bureau of Economic Research, Inc.
  4. Elena Podrecca & Gaetano Carmeci, 2001. "Fixed investment and economic growth: new results on causality," Applied Economics, Taylor & Francis Journals, vol. 33(2), pages 177-182.
  5. Alesina, Alberto & Wacziarg, Romain, 1998. "Openness, country size and government," Journal of Public Economics, Elsevier, vol. 69(3), pages 305-321, September.
  6. Garen, John & Trask, Kathleen, 2005. "Do more open economies have bigger governments? Another look," Journal of Development Economics, Elsevier, vol. 77(2), pages 533-551, August.
  7. 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.
  8. Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1127-70, November.
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