IDEAS home Printed from https://ideas.repec.org/p/lmu/muenar/19284.html
   My bibliography  Save this paper

Does government ideology influence deregulation of product markets? Empirical evidence from OECD countries

Author

Listed:
  • Potrafke, Niklas

Abstract

This paper examines how government ideology has influenced deregulation of product markets in OECD countries. I analyze a dataset of non-manufacturing regulation indicators covering energy, transport and communication industries in 21 OECD countries over the 1980-2003 period and employ two different indices of government ideology. The results suggest that government ideology has had a strong influence on the deregulation process: market-oriented governments promoted the deregulation of the energy, transport and communication industries. This finding identifies remarkable differences between leftist and rightwing governments concerning the role of government in the economy and basic elements of political order.

Suggested Citation

  • Potrafke, Niklas, 2010. "Does government ideology influence deregulation of product markets? Empirical evidence from OECD countries," Munich Reprints in Economics 19284, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:19284
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alan Peacock, 1997. "The Political Economy of Economic Freedom," Books, Edward Elgar Publishing, number 1239.
    2. Behr, Andreas, 2003. "A comparison of dynamic panel data estimators: Monte Carlo evidence and an application to the investment function," Discussion Paper Series 1: Economic Studies 2003,05, Deutsche Bundesbank.
    3. Bjørnskov, Christian, 2005. "Political Ideology and Economic Freedom," Working Papers 05-8, University of Aarhus, Aarhus School of Business, Department of Economics.
    4. Roland Vaubel, 2008. "The political economy of labor market regulation by the European Union," The Review of International Organizations, Springer, vol. 3(4), pages 435-465, December.
    5. Cukierman, Alex & Tommasi, Mariano, 1998. "When Does It Take a Nixon to Go to China?," American Economic Review, American Economic Association, vol. 88(1), pages 180-197, March.
    6. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    7. Alberto Alesina & Nouriel Roubini & Gerald D. Cohen, 1997. "Political Cycles and the Macroeconomy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510944, April.
    8. Randall S. Kroszner & Philip E. Strahan, 1998. "What Drives Deregulation? Economics and Politics of the Relaxation of Bank Branching Restrictions," NBER Working Papers 6637, National Bureau of Economic Research, Inc.
    9. Hans Pitlik, 2008. "The Impact of Growth Performance and Political Regime Type on Economic Policy Liberalization," Kyklos, Wiley Blackwell, vol. 61(2), pages 258-278, May.
    10. Bernardo Bortolotti & Paolo Pinotti, 2008. "Delayed privatization," Public Choice, Springer, vol. 136(3), pages 331-351, September.
    11. Niklas Potrafke, 2009. "Does government ideology influence political alignment with the U.S.? An empirical analysis of voting in the UN General Assembly," The Review of International Organizations, Springer, vol. 4(3), pages 245-268, September.
    12. K. Arin & Mehmet Ulubaşoğlu, 2009. "Leviathan resists: the endogenous relationship between privatization and firm performance," Public Choice, Springer, vol. 140(1), pages 185-204, July.
    13. Duval, Romain, 2008. "Is there a role for macroeconomic policy in fostering structural reforms? Panel evidence from OECD countries over the past two decades," European Journal of Political Economy, Elsevier, vol. 24(2), pages 491-502, June.
    14. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    15. Pitlik, Hans & Wirth, Steffen, 2003. "Do crises promote the extent of economic liberalization?: an empirical test," European Journal of Political Economy, Elsevier, vol. 19(3), pages 565-581, September.
    16. Masami Imai, 2009. "Ideologies, vested interest groups, and postal saving privatization in Japan," Public Choice, Springer, vol. 138(1), pages 137-160, January.
    17. Bloom, David E. & Canning, David & Mansfield, Richard K. & Moore, Michael, 2007. "Demographic change, social security systems, and savings," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 92-114, January.
    18. Axel Dreher & Jan-Egbert Sturm & Heinrich Ursprung, 2008. "The impact of globalization on the composition of government expenditures: Evidence from panel data," Public Choice, Springer, vol. 134(3), pages 263-292, March.
    19. Günther G. Schulze & Heinrich W. Ursprung, 1999. "Globalisation of the Economy and the Nation State," The World Economy, Wiley Blackwell, vol. 22(3), pages 295-352, May.
    20. Bjørnskov, Christian, 2008. "The growth-inequality association: Government ideology matters," Journal of Development Economics, Elsevier, vol. 87(2), pages 300-308, October.
    21. Helge Berger & Stephan Danninger, 2007. "The Employment Effects of Labor and Product Market Deregulation and Their Implications for Structural Reform," IMF Staff Papers, Palgrave Macmillan, vol. 54(3), pages 591-619, July.
    22. Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
    23. Axel Dreher, 2006. "Does globalization affect growth? Evidence from a new index of globalization," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1091-1110.
    24. Niklas Potrafke, 2010. "Labor market deregulation and globalization: empirical evidence from OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(3), pages 545-571, September.
    25. Bortolotti, Bernardo & Fantini, Marcella & Siniscalco, Domenico, 2001. "Privatisation: politics, institutions, and financial markets," Emerging Markets Review, Elsevier, vol. 2(2), pages 109-137, June.
    26. Hans Pitlik, 2007. "A race to liberalization? Diffusion of economic policy reform among OECD-economies," Public Choice, Springer, vol. 132(1), pages 159-178, July.
    27. Christian Bjørnskov, 2005. "Does Political Ideology Affect Economic Growth?," Public Choice, Springer, vol. 123(1), pages 133-146, April.
    28. Bruno, Giovanni S.F., 2005. "Approximating the bias of the LSDV estimator for dynamic unbalanced panel data models," Economics Letters, Elsevier, vol. 87(3), pages 361-366, June.
    29. Athanasios Tagkalakis, 2009. "Fiscal adjustments: do labor and product market institutions matter?," Public Choice, Springer, vol. 139(3), pages 389-411, June.
    30. Christian Bjørnskov & Niklas Potrafke, 2011. "Politics and privatization in Central and Eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 19(2), pages 201-230, April.
    31. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    32. Michael Munger, 2008. "Economic choice, political decision, and the problem of limits," Public Choice, Springer, vol. 137(3), pages 507-522, December.
    33. Giovanni S. F. Bruno, 2005. "Estimation and inference in dynamic unbalanced panel-data models with a small number of individuals," Stata Journal, StataCorp LP, vol. 5(4), pages 473-500, December.
    34. David Roodman, 2006. "How to Do xtabond2," North American Stata Users' Group Meetings 2006 8, Stata Users Group.
    35. Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Social, Employment and Migration Working Papers 35, OECD Publishing.
    36. W. J. Henisz, 2000. "The Institutional Environment for Economic Growth," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 1-31, March.
    37. Niklas Potrafke, 2009. "Did globalization restrict partisan politics? An empirical evaluation of social expenditures in a panel of OECD countries," Public Choice, Springer, vol. 140(1), pages 105-124, July.
    38. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Niklas Potrafke, 2010. "Labor market deregulation and globalization: empirical evidence from OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(3), pages 545-571, September.
    2. Christian Bjørnskov & Niklas Potrafke, 2012. "Political Ideology and Economic Freedom Across Canadian Provinces," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 38(2), pages 143-166.
    3. Niklas Potrafke, 2012. "Political cycles and economic performance in OECD countries: empirical evidence from 1951–2006," Public Choice, Springer, vol. 150(1), pages 155-179, January.
    4. Chang, Chun Ping & Berdiev, Aziz N., 2011. "The political economy of energy regulation in OECD countries," Energy Economics, Elsevier, vol. 33(5), pages 816-825, September.
    5. Potrafke, Niklas, 2010. "The growth of public health expenditures in OECD countries: Do government ideology and electoral motives matter?," Journal of Health Economics, Elsevier, vol. 29(6), pages 797-810, December.
    6. Niklas Potrafke, 2011. "Does government ideology influence budget composition? Empirical evidence from OECD countries," Economics of Governance, Springer, vol. 12(2), pages 101-134, June.
    7. Niklas Potrafke, 2009. "Does government ideology influence political alignment with the U.S.? An empirical analysis of voting in the UN General Assembly," The Review of International Organizations, Springer, vol. 4(3), pages 245-268, September.
    8. Mechtel, Mario & Potrafke, Niklas, 2009. "Political Cycles in Active Labor Market Policies," MPRA Paper 14270, University Library of Munich, Germany.
    9. Niklas Potrafke, 2013. "Economic Freedom and Government Ideology across the German States," Regional Studies, Taylor & Francis Journals, vol. 47(3), pages 433-449, March.
    10. Potrafke, Niklas, 2013. "Globalization and labor market institutions: International empirical evidence," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 829-842.
    11. Belke, Ansgar & Potrafke, Niklas, 2012. "Does government ideology matter in monetary policy? A panel data analysis for OECD countries," Journal of International Money and Finance, Elsevier, vol. 31(5), pages 1126-1139.
    12. Mahmud I Imam & Tooraj Jamasb & Manuel Llorca, 2019. "Political Economy of Reform and Regulation in the Electricity Sector of Sub-Saharan Africa," Working Papers EPRG1917, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    13. Castro, Vítor & Martins, Rodrigo, 2021. "Government ideology and economic freedom," Journal of Comparative Economics, Elsevier, vol. 49(1), pages 73-91.
    14. Mario Mechtel & Niklas Potrafke, 2013. "Electoral cycles in active labor market policies," Public Choice, Springer, vol. 156(1), pages 181-194, July.
    15. Niklas Potrafke, 2010. "Ideology and cultural policy," TWI Research Paper Series 49, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    16. Niklas Potrafke, 2019. "Does Public Sector Outsourcing Decrease Public Employment? Empirical Evidence from OECD Countries," CESifo Economic Studies, CESifo Group, vol. 65(4), pages 464-484.
    17. Niklas Potrafke, 2011. "Public Expenditures on Education and Cultural Affairs in the West German States: Does Government Ideology Influence the Budget Composition?," German Economic Review, Verein für Socialpolitik, vol. 12(1), pages 124-145, February.
    18. Axel Dreher & Jan-Egbert Sturm, 2012. "Do the IMF and the World Bank influence voting in the UN General Assembly?," Public Choice, Springer, vol. 151(1), pages 363-397, April.
    19. Bove, Vincenzo & Efthyvoulou, Georgios & Navas, Antonio, 2017. "Political cycles in public expenditure: butter vs guns," Journal of Comparative Economics, Elsevier, vol. 45(3), pages 582-604.
    20. Georgios Efthyvoulou, 2012. "Political budget cycles in the European Union and the impact of political pressures," Public Choice, Springer, vol. 153(3), pages 295-327, December.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lmu:muenar:19284. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tamilla Benkelberg (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.