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The Effects of International Openness on the Public Sector Growth: An Evidence From OECD Countries

The Effects of International Openness on the Public Sector Growth: An Evidence From OECD Countries

Ali R. Özdemir
Copyright: © 2020 |Pages: 20
ISBN13: 9781522598602|ISBN10: 152259860X|EISBN13: 9781522598619
DOI: 10.4018/978-1-5225-9860-2.ch053
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MLA

Özdemir, Ali R. "The Effects of International Openness on the Public Sector Growth: An Evidence From OECD Countries." Open Government: Concepts, Methodologies, Tools, and Applications, edited by Information Resources Management Association, IGI Global, 2020, pp. 1103-1122. https://doi.org/10.4018/978-1-5225-9860-2.ch053

APA

Özdemir, A. R. (2020). The Effects of International Openness on the Public Sector Growth: An Evidence From OECD Countries. In I. Management Association (Ed.), Open Government: Concepts, Methodologies, Tools, and Applications (pp. 1103-1122). IGI Global. https://doi.org/10.4018/978-1-5225-9860-2.ch053

Chicago

Özdemir, Ali R. "The Effects of International Openness on the Public Sector Growth: An Evidence From OECD Countries." In Open Government: Concepts, Methodologies, Tools, and Applications, edited by Information Resources Management Association, 1103-1122. Hershey, PA: IGI Global, 2020. https://doi.org/10.4018/978-1-5225-9860-2.ch053

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Abstract

Using Ordinary Least Squares (OLS) with panel corrected standard errors for OECD panel data this chapter, in contrast to Compensation hypothesis, finds a negative relationship between openness and the rate of public sector growth. In addition, this inverse relationship is found to be the strongest when electoral systems are more competitive. The empirical results presented here also suggests that openness constrains government growth more when the governments are run by either left-leaning parties or by left-leaning coalitions. This result holds for most measures of government spending and is robust to the inclusion of a wide range of controls. Unlike the existing empirical literature, which focuses on the ‘compensation effect' of openness on government growth, this study supports the ‘competition effect' of openness drawn from the literature on local public finance.

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