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Openness, country size, and government size: Additional evidence from a large cross-country panel


  • Ram, Rati


A body of influential research has suggested that there is a negative association between country size and government size and between country size and openness, and these may account for the positive association between openness and government size. Estimation of several models from 41-year panel data for over 150 countries indicates that while pooled OLS estimates support the foregoing scenario, when cross-country heterogeneity is taken into consideration through the fixed-effects format, there is little evidence of a negative association of country size with either government size or openness. Therefore, it does not seem likely that positive association between openness and government size arises due to the mediating role of country size.

Suggested Citation

  • Ram, Rati, 2009. "Openness, country size, and government size: Additional evidence from a large cross-country panel," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 213-218, February.
  • Handle: RePEc:eee:pubeco:v:93:y:2009:i:1-2:p:213-218

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    References listed on IDEAS

    1. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    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.
    3. Alesina, Alberto & Wacziarg, Romain, 1998. "Openness, country size and government," Journal of Public Economics, Elsevier, vol. 69(3), pages 305-321, September.
    4. World Bank, 2007. "World Development Indicators 2007," World Bank Publications, The World Bank, number 8150.
    5. Biehl, Dieter, 1998. "Wagner's Law: An Introduction to and a Translation of the Last Version of Adolph Wagner's text of 1911," Public Finance = Finances publiques, , vol. 53(1), pages 102-111.
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