War and the growth of government

O’Reilly, Colin; Powell, Benjamin

doi:10.1016/j.ejpoleco.2015.10.001

Cited by 27 publications

(6 citation statements)

References 33 publications

(15 reference statements)

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“…More recently, a related but developing literature investigates the causes of the institutions themselves. Among the variables studied in this literature are immigration (Clark et al 2015), war (O'Reilly and Powell 2015), and the initial level of output per capita and the initial quality of the institutions (March et al 2017).…”

Section: Introductionmentioning

confidence: 99%

Applying panel vector autoregression to institutions, human capital, and output

Murphy

O’Reilly

2018

Empir Econ

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We bridge two areas of study by applying panel vector autoregression (PVAR) to human capital, political institutions, economic institutions, and economic output per capita. Institutions and human capital have competed within the scholarly literature as hypotheses explaining the origins of economic growth. Elsewhere, our measure of economic institutions, the Economic Freedom of the World index, has recently been explored extensively as a dependent variable, whereas previously it had been used as an explanatory variable. We wish to measure the interrelationships between political and economic institutions, as well as their interrelationships with economic output and human capital, in contrast to the literature which emphasizes the importance of political institutions alone. We explore these interrelationships in a PVAR model, finding that, descriptively at least, higher-quality economic institutions are associated with more output. We also find weak evidence that higher-quality political institutions are associated with less output and less education. We also find a robust positive effect of education on the quality of economic institutions. In performing this analysis, we contribute to the literature on the institutions and human capital debate, as well as to the literature on the causes of free economic institutions.

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Section: Introductionmentioning

confidence: 99%

Applying panel vector autoregression to institutions, human capital, and output

Murphy

O’Reilly

2018

Empir Econ

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“…We control for overseas development aid and oil rents, as a percentage of the country's GDP (Djankov et al, 2008; Sheehan & Young, 2015; Young & Bologna, 2016). In addition, following earlier research on the topic, we include the country's age dependency ratio, the level of urbanisation, financial openness, the extent to globalisation of the home economy (De Mendonça & De Oliveira, 2019), the political orientation of the chief executive party of the country (Herwartz & Theilen, 2014; Potrafke, 2011, 2017), and whether a year was an election year (Castro & Martins, 2018; De Haan & Klomp, 2013; Dubois, 2016; Herwartz & Theilen, 2014) or was marred by internal conflict (O'Reilly & Powell, 2015; Young & Bologna, 2016).…”

Section: Methodsmentioning

confidence: 99%

On the relationship between trade openness and government size

Farhad¹,

Jetter²

2022

World Economy

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Does trade openness systematically imply bigger governments, as proposed by Rodrik (1998)? This paper presents a novel and more refined explanation for when and why international trade may enlarge the public sector. We propose that trade openness is associated with bigger governments if (i) the price volatility of a country's export basket is substantial and (ii) the country is democratic. The first condition satisfies the prior that open trade barriers indeed introduce uncertainty and external risk -something that is not necessarily the case for all trade. The second condition ensures that the people's desire for greater economic security can be realized through government spending. Empirical evidence for 143 countries (accounting for approximately 96 percent of world population) from 2000-2016 is consistent with this hypothesis. Exploring areas of public spending, we find intuitive patterns: Consistent with the compensation hypothesis, government spending on economic affairs and housing increases significantly with trade openness, whereas public spending on education, health care, and the military are not immediately concerned. As with our general result, this is only the case in democracies that are subject to high price volatility on the global market.

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“…As war is embedded in a broader body of rules or an institutional frame (Korf, 2007), it can disrupt the functioning of markets and institutions (Thoradeniya et al , 2022) and cause regulatory change for MNEs via change to countries’ legal systems (Voors and Bulte, 2014). According to O'Reilly and Powell (2015), wars tend to increase the scope of warring governments economic regulation and decrease economic freedom. Moreover, wars can mobilize or change the preferences of the MNE’s institutional stakeholders (Bellows and Miguel, 2006; O'Reilly and Powell, 2015), which in turn requires organizational responses or strategies to remain legitimate and competitive (Oliver, 1991; Peng, 2003).…”

Section: The Nature Of Warmentioning

confidence: 99%

Inter-state war, institutions and multinationals: insights from the Russian-Ukraine war

Owens

2023

MBR

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Purpose Wars, and violent conflicts generally, can generate significant institutional dynamics and new legitimacy pressures for multinational enterprises (MNEs). The purpose of this paper is to understand the nature or source of institutional pressures facing MNEs in war and to examine how MNEs respond and navigate these institutional pressures. Design/methodology/approach This is a conceptual paper. Findings Through the theoretical lens of institutional theory and drawing on insights from the devastating Russian–Ukrainian war in Europe, the study provides a framework that explains the nature of institutional pressures impacting MNEs in a major war conflict and how MNEs respond to these pressures. Central to the framework is the impact of formal and informal institutions on MNEs during war. As a result of regulatory and social pressures, MNEs have to make important strategic decisions either to protect their legitimacy or to defend their economic objectives against institutional demands. Originality/value As the paper situates the pressures of war for MNEs in a formal and informal institutional context, this offers a new approach to understanding the costs and pressures of war on MNEs.

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War and the growth of government

Cited by 27 publications

References 33 publications

Applying panel vector autoregression to institutions, human capital, and output

Applying panel vector autoregression to institutions, human capital, and output

On the relationship between trade openness and government size

Inter-state war, institutions and multinationals: insights from the Russian-Ukraine war

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