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.

Liberati, P. (2007). Trade Openness, Capital Openness and Government Size. JOURNAL OF PUBLIC POLICY, 27(2), 215-247 [10.1017/S0143814X07000670].

Trade Openness, Capital Openness and Government Size

LIBERATI, PAOLO
2007-01-01

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.
2007
Liberati, P. (2007). Trade Openness, Capital Openness and Government Size. JOURNAL OF PUBLIC POLICY, 27(2), 215-247 [10.1017/S0143814X07000670].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11590/133038
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