抄録
In this article, the authors try to understand the factors affecting government consumption, government fixed investment, and total disbursements among 19 OECD countries. Many empirical analyses have ever tried to explain the reason why welfare states expanded after the WW II, by focusing on industrialization factor and/or political factors. In the 1990s, great advance of econometric method allow to test several theories by using Time-Series Cross-Section data, and this trend stimulate the effort to quantify the political and institutional character traits of the countries.
Our analysis, using TSCS data for 19 countries over the period from 1975 to 1999, is distinctive at least two ways. First, in, contrast to former studies, we focus on the period when most OECD countries do not necessarily expand after oil shock. Second, we can use many important political and fiscal variables, which former studies could not use. The estimation result with two-way fixed effects model shows that those countries in the bad fiscal situation might rein in government consumption and total disbursement. It suggests that not only fiscal demand increase expenditure, but government fiscal constraint might hold down expenditures. Also, we confirm that increase in total trade have been associated with less government expenditures. This result supports “efficiency hypothesis” which claims globalization trend put pressure on governments to cut back expenditures. In addition, our estimation shows different result which is expected from traditional “Wagner's Law”, which claims increase in GDP per capita would expand gov-ernment expenditure.
