The Impact of Globalization on the Composition of Government Expenditures: Evidence from Panel Data

Abstract

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Globalization, welfare regimes and social protection expenditures in Western and Eastern European countries

“…The efficiency hypothesis argues that globalization generally restrains governments via increased budgetary pressure due to trade liberalization and increased factor mobility (Dreher et al (2008a)). …”

“…They rather constitute two effects operating in opposite directions, off-setting each other. As Dreher et al (2008a) argue, one can think of the government as balancing the benefits and costs of providing public goods and services. Globalization leads to a downward pressure on public expenditures, on public consumption goods in particular, through the efficiency channel.…”

“…A number of empirical papers (see the surveys provided by Dreher et al (2008a) and Gemmel et al (2008)) try to shed light on this issue. The major part of this empirical research proceeds by modeling either total government expenditures or a particular element of public spending as a function of one or more proxies for globalization.…”

The growth of public health expenditures in OECD countries: Do government ideology and electoral motives matter?

“…Second, public expenditures and respective changes in health policy might be affected by globalization. Therefore, we follow Dreher et al (2007) and include the KOF index of globalization (see Dreher (2006a) and Dreher et al (2008)). Alternatively, one could use tradeopenness as measure of globalization.…”

Is German domestic social policy politically controversial?

“…20 Dreher et al (2008a) andGemmell et al (2008), for example, empirically investigate the influence of globalization on budget composition.…”