Inequality, Political Systems and Public Spending
Political regimes and institutions di®er across countries. Such char- acteristics in°uence public spending within each country. The aim of this paper is to check for the existence of a link between political institu- tions, income inequality and public spending. We develop an empirical investigation, based on panel data analysis, on the determinants of pub- lic spending focusing on political, economic, demographic and social variables in large sample of developed and developing countries from 1970 to 2005. In particular, we focus on the e®ects of electoral rules on government consumption ¯nding that in countries with proportional electoral rule an increase in the heterogeneity of the government in- creases government consumption, while in countries with majoriratian electoral rule, a shift from presidential to parliamentary system leads to an increase in government consumption. We ¯nd that the link between income distribution, measured by the Gini index, and public spending depends upon institutional characteristics. Moreover, we ¯nd empiri- cal support for the argument that government spending is a policy tool used by governments to insurance the domestic economy from external shocks stemming from international trade.
|Date of creation:||Apr 2009|
|Date of revision:||Apr 2009|
|Contact details of provider:|| Postal: |
Phone: +39 02 6448 3089
Fax: +39 02 6448 3085
Web page: http://dipeco.economia.unimib.it
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
- Persson, Torsten & Tabellini, Guido, 1994.
"Is Inequality Harmful for Growth?,"
American Economic Review,
American Economic Association, vol. 84(3), pages 600-621, June.
- Robert E. Hall & Charles I. Jones, 1999.
"Why Do Some Countries Produce So Much More Output per Worker than Others?,"
NBER Working Papers
6564, National Bureau of Economic Research, Inc.
- Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
- Milanovic, Branko, 1999. "Do more unequal countries redistribute more? does the median voter hypothesis hold?," Policy Research Working Paper Series 2264, The World Bank.
- Alberto Alesina & Reza Baqir & William Easterly, 1997.
"Public Goods and Ethnic Divisions,"
NBER Working Papers
6009, National Bureau of Economic Research, Inc.
- Baqir, Reza & Easterly, William & Alesina, Alberto, 1999. "Public Goods and Ethnic Divisions," Scholarly Articles 4551797, Harvard University Department of Economics.
- Alesina, Alberto & Baqir, Reza & Easterly, William, 1999. "Public goods and ethnic divisions," Policy Research Working Paper Series 2108, The World Bank.
- Hausman, Jerry A, 1978.
"Specification Tests in Econometrics,"
Econometric Society, vol. 46(6), pages 1251-71, November.
- Filippo Gregorini, 2009. "Political Geography and Income Inequalities," Working Papers 152, University of Milano-Bicocca, Department of Economics, revised Feb 2009.
- Lindert, Peter H., 1996. "What Limits Social Spending?," Explorations in Economic History, Elsevier, vol. 33(1), pages 1-34, January.
- La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999.
"The Quality of Government,"
Journal of Law, Economics and Organization,
Oxford University Press, vol. 15(1), pages 222-79, April.
- Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, 1998. "The Quality of Goverment," NBER Working Papers 6727, National Bureau of Economic Research, Inc.
- Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, . "The Quality of Government," Working Paper 19452, Harvard University OpenScholar.
- Andrei Shleifer & Robert W. Vishny, 1998. "The Quality of Government," Harvard Institute of Economic Research Working Papers 1847, Harvard - Institute of Economic Research.
- Dani Rodrik, 1996.
"Why Do More Open Economies Have Bigger Governments?,"
NBER Working Papers
5537, National Bureau of Economic Research, Inc.
- 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.
- Rodrik, Dani, 1996. "Why do More Open Economies Have Bigger Governments?," CEPR Discussion Papers 1388, C.E.P.R. Discussion Papers.
- Hausman, Jerry A., 1983. "Specification and estimation of simultaneous equation models," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 1, chapter 7, pages 391-448 Elsevier.
- Alessandro Lizzeri & Nicola Persico, .
""The Provision of Public Goods Under Alternative Electoral Incentives'',"
CARESS Working Papres
98-08, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Nicola Persico & Alessandro Lizzeri, 2001. "The Provision of Public Goods under Alternative Electoral Incentives," American Economic Review, American Economic Association, vol. 91(1), pages 225-239, March.
- Alessro Lizzeri & Nicola Persico, . "The Provision of Public Goods Under Alternative Electoral Incentives," Penn CARESS Working Papers b96440ba0bfa06ca550ac40aa, Penn Economics Department.
- Beck, Thorsten & Clarke, George & Groff, Alberto & Keefer, Philip & Walsh, Patrick, 2000. "New tools and new tests in comparative political economy - the database of political institutions," Policy Research Working Paper Series 2283, The World Bank.
- Gian Maria Milesi-Ferretti & Roberto Perotti & Massimo Rostagno, 2002.
"Electoral Systems And Public Spending,"
The Quarterly Journal of Economics,
MIT Press, vol. 117(2), pages 609-657, May.
- Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October.
- Filippo Gregorini, 2007. "Political Geography and Income Inequalities," DISCE - Quaderni dell'Istituto di Teoria Economica e Metodi Quantitativi itemq0746, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
When requesting a correction, please mention this item's handle: RePEc:mib:wpaper:159. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roberto Reale)
If references are entirely missing, you can add them using this form.