Trade openness, capital openness and government size

Paolo Liberati

MPRA Paper from University Library of Munich, Germany

Abstract: This paper provides empirical evidence of the relation between trade openness, capital openness and government expenditures in a cross sectional time-series context. It is shown that capital openness is significantly and negatively related to government expenditures in line with the conventional wisdom that capital mobility may undermine the ability of governments to maintain larger public sectors. More importantly, the compensation hypothesis originally proposed by Rodrik (1998) and traceable back to Cameron (1978) is not in general supported by the data.

Keywords: Government Size; Openness; Compensation hypothesis (search for similar items in EconPapers)
JEL-codes: H11 H50 H77 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (51)

Published in Journal of Public Policy 27.2(2007): pp. 215-247

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https://mpra.ub.uni-muenchen.de/44371/1/MPRA_paper_44371.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/44569/1/MPRA_paper_44569.pdf revised version (application/pdf)

Related works:
Journal Article: Trade Openness, Capital Openness and Government Size (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:44371

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