Population size and the size of government

Arbeitspapier

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 were incorrectly specified, not accounting for cross-sectional dependence, non-stationarity and cointegration as well as parameter heterogeneity. Using a panel time-series approach that adequately models these issues, we find that population size has a positive long-run effect on government size. This finding suggests that the detrimental effects of population size on government size (primarily due to a greater risk of social conflict) dominate its beneficial ones (primarily due to scale economies). We also show that population size increases government size especially in countries that are vulnerable to social conflict due to ethnic heterogeneity.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionsbeiträge ; No. 2018-03

Classification and Topics

• Classification: Wirtschaft ; Structure, Scope, and Performance of Government ; National Government Expenditures and Related Policies: General
• Subject: government size ; country size ; social conflict ; ethnic fractionalization ; non-stationarity ; cross-sectional dependence ; panel cointegration ; parameter heterogeneity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Krieger, Tim ; Meierrieks, Daniel
• Event: Veröffentlichung
• (who): Albert-Ludwigs-Universität Freiburg, Wilfried-Guth-Stiftungsprofessur für Ordnungs- und Wettbewerbspolitik
• (where): Freiburg
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/180219
• Last update: 10.03.2025, 11:43 AM CET