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Rule of law and the size of government

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  • HOLCOMBE, RANDALL G.
  • RODET, CORTNEY S.

Abstract

If those with political power benefit from corrupt institutions, rulers might not adopt the rule of law so the ruling class can command a larger share of a smaller pie. An empirical analysis reveals that the size of government is larger in those countries that enforce the rule of law. If government expenditures provide some measure of the ability of the ruling class to command resources, this suggests that those with political power could benefit from imposing a fairer and more objective legal structure. Another conjecture is that those in power maintain corrupt governments to pay off their supporters and enhance their ability to remain in power. However, the rule of law is also positively associated with political stability, so better enforcement of the rule of law also enhances the ability of incumbent governments to remain in power.

Suggested Citation

  • Holcombe, Randall G. & Rodet, Cortney S., 2012. "Rule of law and the size of government," Journal of Institutional Economics, Cambridge University Press, vol. 8(1), pages 49-69, March.
    • Handle: RePEc:cup:jinsec:v:8:y:2012:i:01:p:49-69_00
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    Cited by:

    1. Christian Bjørnskov & Gert Svendsen, 2013. "Does social trust determine the size of the welfare state? Evidence using historical identification," Public Choice, Springer, vol. 157(1), pages 269-286, October.
    2. Fernando del Río, 2021. "The impact of rent seeking on social infrastructure and productivity," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1741-1760, August.
    3. Gaston, Noel & Rajaguru, Gulasekaran, 2013. "International migration and the welfare state revisited," European Journal of Political Economy, Elsevier, vol. 29(C), pages 90-101.
    4. Matthew Brown, 2016. "Identifying Drivers of Economic Reform: A Case Studies Approach," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 31(Spring 20), pages 1-19.
    5. Pellegrini Lorenzo & Luca Tasciotti, 2019. "Corruption: Public and Private," Working Papers 220, Department of Economics, SOAS University of London, UK.
    6. Randall Holcombe & Christopher Boudreaux, 2013. "Institutional quality and the tenure of autocrats," Public Choice, Springer, vol. 156(3), pages 409-421, September.
    7. Wu, Ziqi & Xiao, Yi & Zhang, Jian & Wu, Jingyi, 2024. "Justice Reform and Entrepreneurship: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 1190-1203.
    8. Christopher John Boudreaux, 2015. "Democratic age and the size of governmen," Economics Bulletin, AccessEcon, vol. 35(3), pages 1531-1542.
    9. Cristian Barra & Nazzareno Ruggiero, 2023. "Institutional quality and public spending in Europe: A quantile regression approach," Economics and Politics, Wiley Blackwell, vol. 35(3), pages 949-1019, November.

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