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Political Polarization and the Size of Government

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  • Lindqvist, Erik

    (Research Institute of Industrial Economics (IFN))

  • Östling, Robert

    (Stockholm School of Economics)

Abstract

We study the effect of political polarization on government spending and redistribution using the dispersion of self-reported political preferences as our measure of polarization. Politically polarized countries have lower levels of redistribution and government consumption. The relationship between political polarization and the size of government is stronger in democratic countries, indicating that the effect goes through the political system. The results are robust to a large set of controlvariables, including GDP per capita and income inequality.

Suggested Citation

  • Lindqvist, Erik & Östling, Robert, 2008. "Political Polarization and the Size of Government," Working Paper Series 749, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0749
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    More about this item

    Keywords

    Political Polarization; Social Cohesion; Ethnic Fractionalization; Social Capital; Size of Government;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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