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Factors of the Size of Government in Developed Countries

  • Boris Gramc
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    The purpose of the analysis presented in the paper is to identify various factors, including economic, social, political, demographic and cultural ones, that could shape the differences in the size of government across countries and to verify their effect with the use of econometric analysis. The analysis focuses on "budgetary" government, usually measured with some government spending ratio, as well as on "non-budgetary" government, measured with the index of the extent of regulation in the economy. The results of the analysis show that economic factors are more important in explaining the variation in the size of government consumption and in the size of non-budgetary government, whereas political, social and cultural factors are more important in explaining the variation in the size of transfers. Besides, the results also indicate, that there exists "trade-off" between budgetary and non-budgetary government.

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    Article provided by University of Economics, Prague in its journal Prague Economic Papers.

    Volume (Year): 2007 (2007)
    Issue (Month): 2 ()
    Pages: 130-142

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    Handle: RePEc:prg:jnlpep:v:2007:y:2007:i:2:id:302:p:130-142
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    1. Alesina, Alberto & Wacziarg, Romain, 1998. "Openness, country size and government," Journal of Public Economics, Elsevier, vol. 69(3), pages 305-321, September.
    2. Pryor, Frederic L., 2002. "Quantitative notes on the extent of governmental regulations in various OECD nations," International Journal of Industrial Organization, Elsevier, vol. 20(5), pages 693-714, May.
    3. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, June.
    4. Ruggie, John Gerard, 1982. "International regimes, transactions, and change: embedded liberalism in the postwar economic order," International Organization, Cambridge University Press, vol. 36(02), pages 379-415, March.
    5. Anthony Annett, 2000. "Social Fractionalization, Political Instability, and the Size of Government," IMF Working Papers 00/82, International Monetary Fund.
    6. Torsten Persson, 2002. "Do Political Institutions Shape Economic Policy?," Econometrica, Econometric Society, vol. 70(3), pages 883-905, May.
    7. James Gwartney & Randal Holcombe & Robert Lawson, 1998. "The Scope of Government and the Wealth of Nations," Cato Journal, Cato Journal, Cato Institute, vol. 18(2), pages 163-190, Fall.
    8. 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.
    9. Rowley, Charles K & Tollison, Robert D, 1994. " Peacock and Wiseman on the Growth of Public Expenditure: Editor's Note," Public Choice, Springer, vol. 78(2), pages 125-28, February.
    10. Abrams, Burton A & Settle, Russell F, 1999. " Women's Suffrage and the Growth of the Welfare State," Public Choice, Springer, vol. 100(3-4), pages 289-300, September.
    11. Alesina, Alberto & Spolaore, Enrico & Wacziarg, Romain, 2005. "Trade, Growth and the Size of Countries," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 23, pages 1499-1542 Elsevier.
    12. Kau, James B & Rubin, Paul H, 2002. " The Growth of Government:," Public Choice, Springer, vol. 113(3-4), pages 389-402, December.
    13. Husted, Thomas A & Kenny, Lawrence W, 1997. "The Effect of the Expansion of the Voting Franchise on the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 54-82, February.
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