VARIETIES OF CAPITALISM AND GOVERNMENT SPENDING IN DEVELOPED AND DEVELOPING COUNTRIES

Joachim Ahrens, Rainer Schweickert and Juliane Zenker
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Joachim Ahrens: PFH Gottingen Private University of Applied Science, Germany
Juliane Zenker: University of Hannover, Germany

Journal of Economic Development, 2015, vol. 40, issue 1, 113-136

Abstract: Empirical papers on the size of government suffer from neglecting preferences for government activity as discussed in the literature on varieties of capitalism. Cross-country evidence for a sample of 126 developed and developing countries reveals a global divide. Among developing countries, Asian countries are closer to continental European economies, i.e., they reveal relatively higher levels of spending dependent on the quality of governance. Latin American countries rather tend towards low-spending anglo-saxon economies and spend to stabilize rather than to fight inequality. Considering these preferences, we do not find evidence that open countries spend more in order to buffer macroeconomic risks.

Keywords: Government Size; Political Governance; Economic Systems; Inequality; Openness; Developing Regions (search for similar items in EconPapers)
JEL-codes: H10 P10 P51 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (6)

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