The impact of globalization on the composition of government expenditures: Evidence from panel data

Dreher, Axel; Sturm, Jan‐Egbert; Ursprung, Heinrich W.

doi:10.1007/s11127-007-9223-4

Cited by 183 publications

(57 citation statements)

References 52 publications

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“…The empirical evidence on how globalisation influences tax rates and public (social) spending tends to support the compensation hypothesis rather than the race-to-the-bottom hypothesis (Cameron, 1978;Dreher, Sturm, & Ursprung, 2008;Gaston & Rajaguru, 2013a,2013bGozgor & Ranjan, 2017;Gründler & Köllner, 2018;Herwartz & Theilen, 2014;Meinhard & Potrafke, 2012;Potrafke, 2009;Walter, 2010;Yay & Aksoy, 2018;-for surveys see Potrafke, 2015;Schulze & Ursprung, 1999;Ursprung, 2008). 2 Social expenditure has, for example, drastically increased in OECD countries and dominates fiscal policies-proceeding globalisation notwithstanding.…”

Section: Industrialised Countriesmentioning

confidence: 99%

The globalisation–welfare state nexus: Evidence from Asia

Potrafke

2018

World Economy

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How globalisation influences social expenditure has been examined for industrialised countries. Globalisation has often been shown to be positively associated with social expenditure in established industrialised countries, a finding that corroborates the compensation hypothesis. Scholars have focused on industrialised countries, because social expenditure is difficult to measure in developing countries. I use new data on social expenditure for Asian non‐OECD countries. Globalisation is measured by the new KOF Globalisation Index. My results do not suggest that globalisation influenced social expenditures in Asia. Neither do the results suggest that the nexus between globalisation and social expenditures varied across high‐income countries, such as Hong Kong and Singapore, and lower‐income Asian countries or across Asian regions. It is conceivable that Asian citizens did not demand increasing social support when globalisation proceeded rapidly because they enjoyed family and other private assistance. Asian countries also have weaker tax and labour market institutions than OECD countries and have therefore more difficulties in increasing social expenditure.

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Section: Industrialised Countriesmentioning

confidence: 99%

The globalisation–welfare state nexus: Evidence from Asia

Potrafke

2018

World Economy

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“…Empirical evidence suggests that neither of these opposing effects is very strong, leaving a substantial variation in social spending that is not explained by globalization but rather chosen by native governments. Studies by Dreher, Sturm, and Ursprung (2008), Meinhard and Potrafke (2012) and Potrafke (2015) all suggest that globalization is not associated with a lower tax revenue and possibly correlates positively with government expenditure as a share of GDP. The positive association between globalization and government size is however not robust and seems to depend on a version of the Penn World Tables used in the analysis, as shown by Jetter and Parmeter (2015).…”

Section: H3a (Cushioning Health and Education Spending)mentioning

confidence: 99%

Can social spending cushion the inequality effect of globalization?

Bergh

Mirkina

Nilsson

2019

Economics & Politics

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This paper examines whether social spending cushions the effect of globalization on within‐country inequality. Using information on disposable and market income inequality and data on overall social spending, and health and education spending from the ILO and the World Bank/WHO, we analyze whether social spending moderates the association between economic globalization and inequality. The results confirm that economic globalization—especially economic flows—associates with higher income inequality, an effect driven by non‐OECD countries. Health spending is strongly associated with lower inequality, but we find no robust evidence that any kind of social spending negatively moderates the association between economic globalization and inequality.

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“…The size and composition of government spending and regulations could in turn affect inequality outcomes. The available empirical evidence about the consequences of globalisation on government spending, taxation and regulations is mixed (see Dreher, Sturm, & Ursprung, 2008;Meinhard & Potrafke, 2012;Milanovic, 2000;Potrafke, 2010aPotrafke, , 2013Potrafke, , 2015.…”

Section: Globalisation and Government Policiesmentioning

confidence: 99%

Top income shares inOECDcountries: The role of government ideology and globalisation

Dorn

Schinke

2018

World Economy

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This paper investigates how government ideology and globalisation are associated with top income shares in 17 OECD countries over the period 1970 to 2014. We use top income shares of the World Wealth and Income Database (WID). Globalisation is measured by the KOF index of globalisation. Static and dynamic panel model results show that the top income shares increased more under right wing governments than under left wing governments. The ideology‐induced effect was stronger when globalisation proceeded more rapidly. Globalisation was positively correlated with income shares of the upper‐middle class (P99–P90), but negatively with income shares of the rich (top 1%) in the overall sample. We show that the relationship differs between Anglo‐Saxon countries and other OECD countries. Globalisation was more pro‐rich in Anglo‐Saxon countries than in other OECD countries. Government ideology does not turn out to have a statistically significant effect on top income shares in Anglo‐Saxon countries after the 1980s, whereas ideology‐induced differences in the distributional outcomes continued in other OECD countries.

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The impact of globalization on the composition of government expenditures: Evidence from panel data

Cited by 183 publications

References 52 publications

The globalisation–welfare state nexus: Evidence from Asia

The globalisation–welfare state nexus: Evidence from Asia

Can social spending cushion the inequality effect of globalization?

Top income shares inOECDcountries: The role of government ideology and globalisation

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