State Capacity and the Quality of Policies: Revisiting the Relationship between Openness and the Size of Government

Arbeitspapier

The literature has identified that countries with higher levels of openness tend to present a larger government sector as a way to reduce the risks to the economy that openness entails. This paper argues that there are a number of policies that can mitigate trade-induced risks, many of which do not have the necessary implication of increasing public spending. Yet, many such policies require governmental capabilities not available to any country. For that reason, the relationship between openness and the size of government might be mediated by the quality of its public sector. While countries with weak government capabilities will tend to rely on spending expansions to deal with trade-induced volatility, countries with stronger governmental capabilities might address such challenges by more efficient and less costly means. The empirical analysis in this paper shows that the effect of openness on government consumption is mediated by the quality of government institutions.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IDB Working Paper Series ; No. IDB-WP-532

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Bureaucracy; Administrative Processes in Public Organizations; Corruption ; Trade: Other ; Structure, Scope, and Performance of Government ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance ; International Linkages to Development; Role of International Organizations ; Capitalist Systems: Political Economy
• Thema: Government capabilities ; Quality of policies ; Openness ; Government size

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Chuaire, María Franco ; Scartascini, Carlos G. ; Tommasi, Carlos
• Ereignis: Veröffentlichung
• (wer): Inter-American Development Bank (IDB)
• (wo): Washington, DC
• (wann): 2014

Weitere Informationen

• Handle: http://hdl.handle.net/10419/115483
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ