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Democratic age and the size of governmen

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  • Christopher John Boudreaux

    (Texas A&M International University)

Abstract

One institutional characteristic of democracy is that it provides incentives to allocate resources towards rent seeking and other unproductive activities. Countries that have been democratic for long periods of time allow for sectors to become captured, special interest groups to flourish, and rent seeking activities to replace entrepreneurship via the market system. This study empirically analyzes the relationship between democratic age and the size of the public sector, and it finds that as democracies mature, government spending increases as a share of the market. The results suggest that a decade increase in the democratic age of a country is associated with a 2% to 3% increase in government spending.

Suggested Citation

  • Christopher John Boudreaux, 2015. "Democratic age and the size of governmen," Economics Bulletin, AccessEcon, vol. 35(3), pages 1531-1542.
    • Handle: RePEc:ebl:ecbull:eb-15-00063
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    References listed on IDEAS

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    1. Andrew Smith & Graham Brownlow, 2023. "Informal Institutions as Inhibitors of Rent-Seeking Entrepreneurship: Evidence From U.S. Legal History," Entrepreneurship Theory and Practice, , vol. 47(6), pages 2323-2346, November.

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    More about this item

    Keywords

    democratic age; government spending; public sector;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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