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Population size and the size of government
[journal article]
Abstract We examine the effect of population size on government size for a panel of 130 countries for the period between 1970 and 2014. We show that previous analyses of the nexus between population size and government size are incorrectly specified and fail to consider the influence of cross-sectional depen... view more
We examine the effect of population size on government size for a panel of 130 countries for the period between 1970 and 2014. We show that previous analyses of the nexus between population size and government size are incorrectly specified and fail to consider the influence of cross-sectional dependence, non-stationarity and cointegration. Using a panel time-series approach that adequately accounts for these issues, we find that population size has a positive long-run effect on government size. This finding suggests that effects of population size that increase government size (primarily due to the costs of heterogeneity, congestion, crime and conflict) dominate effects that reduce government size (primarily due to scale economies).... view less
Classification
Public Finance
Free Keywords
cross-sectional dependence; government size; non-stationarity; panel cointegration; population size
Document language
English
Publication Year
2020
Journal
European Journal of Political Economy (2020)
Handle
http://hdl.handle.net/10419/218870
ISSN
1873-5703
Status
Postprint; peer reviewed
Licence
Creative Commons - Attribution-Noncommercial-No Derivative Works 4.0