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Political Polarization and the Size of Government

Author

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  • Lindqvist, Erik

    () (Research Institute of Industrial Economics)

  • Östling, Robert

    () (Institute for International Economic Studies, Stockholm University)

Abstract

We study the effect of political polarization on public spending using the dispersion of self-reported political preferences as our measure of polarization. Political polarization is strongly associated with smaller government in democratic countries, but there is no relationship between polarization and the size of government in undemocratic countries. The results are robust to a large set of control variables, including GDP per capita and income inequality.

Suggested Citation

  • Lindqvist, Erik & Östling, Robert, 2006. "Political Polarization and the Size of Government," SSE/EFI Working Paper Series in Economics and Finance 628, Stockholm School of Economics, revised 18 Aug 2009.
  • Handle: RePEc:hhs:hastef:0628
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    Cited by:

    1. Mounir Karadja & Johanna Mollerstrom & David Seim, 2017. "Richer (and Holier) Than Thou? The Effect of Relative Income Improvements on Demand for Redistribution," The Review of Economics and Statistics, MIT Press, vol. 99(2), pages 201-212, May.
    2. Grechyna, Daryna, 2016. "On the determinants of political polarization," Economics Letters, Elsevier, vol. 144(C), pages 10-14.
    3. Azzimonti, Marina & Talbert, Matthew, 2014. "Polarized business cycles," Journal of Monetary Economics, Elsevier, vol. 67(C), pages 47-61.
    4. Piolatto, Amedeo & Schuett, Florian, 2015. "Media competition and electoral politics," Journal of Public Economics, Elsevier, vol. 130(C), pages 80-93.
    5. Sjoerd Beugelsdijk & Mariko J. Klasing & Petros Milionis, 2019. "Value Diversity and Regional Economic Development," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(1), pages 153-181, January.
    6. repec:dgr:kubcen:2013072 is not listed on IDEAS
    7. Tjaša Bjedov & Simon Lapointe & Thierry Madiès, 2014. "The impact of within-party and between-party ideological dispersion on fiscal outcomes: evidence from Swiss cantonal parliaments," Public Choice, Springer, vol. 161(1), pages 209-232, October.
    8. Stefan Krasa & Mattias Polborn, 2014. "Social Ideology and Taxes in a Differentiated Candidates Framework," American Economic Review, American Economic Association, vol. 104(1), pages 308-322, January.
    9. Melki, Mickael & Pickering, Andrew, 2020. "Polarization and corruption in America," European Economic Review, Elsevier, vol. 124(C).
    10. Kenan Huremovic & Ali Ozkes, 2020. "Polarization in Networks: Identification-alienation Framework," Papers 2007.07061, arXiv.org, revised Jan 2021.
    11. Funke, Manuel & Schularick, Moritz & Trebesch, Christoph, 2016. "Going to extremes: Politics after financial crises, 1870–2014," European Economic Review, Elsevier, vol. 88(C), pages 227-260.
    12. Melki, Mickael & Pickering, Andrew, 2014. "Ideological polarization and the media," Economics Letters, Elsevier, vol. 125(1), pages 36-39.
    13. Paola Annoni & Nicholas Charron, 2019. "Measurement Assessment in Cross-Country Comparative Analysis: Rasch Modelling on a Measure of Institutional Quality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(1), pages 31-60, January.
    14. Mickael Melki & Andrew Pickering, 2014. "Polarization and Government Debt," Discussion Papers 14/10, Department of Economics, University of York.
    15. Jason Sorens, 2014. "Fiscal federalism, jurisdictional competition, and the size of government," Constitutional Political Economy, Springer, vol. 25(4), pages 354-375, December.
    16. repec:tiu:tiucen:2013072 is not listed on IDEAS
    17. Mohammad Farhad & Michael Jetter, 2019. "On the Relationship between Trade Openness and Government Size," CESifo Working Paper Series 7832, CESifo.
    18. Alexander Zimper & Alexander Ludwig, 2009. "On attitude polarization under Bayesian learning with non-additive beliefs," Journal of Risk and Uncertainty, Springer, vol. 39(2), pages 181-212, October.
    19. Grechyna, Daryna, 2015. "Quantifying the Impact of Political Frictions on Public Policy," MPRA Paper 65266, University Library of Munich, Germany.
    20. Leonardo A. Gatica Arreola, 2012. "¿Por qué el distanciamiento ideológico disminuye la provisión de bienes públicos?; una explicación basada en el empleo clientelar," Estudios de Economia, University of Chile, Department of Economics, vol. 39(1 Year 20), pages 27-51, June.
    21. Grechyna, Daryna, 2016. "Political frictions and public policy outcomes," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 484-495.
    22. Piolatto, Amedeo & Schuett, Florian, 2015. "Media competition and electoral politics," Journal of Public Economics, Elsevier, vol. 130(C), pages 80-93.
    23. Beugelsdijk, Sjoerd & Klasing, Mariko J., 2016. "Diversity and trust: The role of shared values," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 522-540.

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    More about this item

    Keywords

    Political polarization; social cohesion; size of government; redistribution;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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