Does urbanization mean bigger governments?

Michael Jetter and Christopher Parmeter

No 10730, Documentos de Trabajo de Valor Público from Universidad EAFIT

Abstract: This paper proposes urbanization as a determinant of government size. As people move to cities, their demand for a more de ned set of regulations, but also for basic health, education, and income standards rises. Our theoretical framework determines how the regional distribution of the population a ects government size. We test this theory on panel data of 175 countries from 1960 to 2010 and two state-level samples from Colombia and Germany. Results demonstrate a strong positive e ect from urbanization on government spending, with a 1 percent increase in the amount of urban citizens leading to a 0.2 percent rise in public expenditure. Our ndings indicate that public sectors may become more important as worldwide urbanization is progressing. This result underlines why government e ectiveness and the quality of public goods provision will be even more important in the future.

Keywords: Government Size; Urbanization; Population Concentration (search for similar items in EconPapers)
JEL-codes: H10 H50 H75 R50 (search for similar items in EconPapers)
Pages: 41
Date: 2013-04-13
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Does Urbanization Mean Bigger Governments? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000122:010730

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