Introducing and Testing a New Model to Explain the Size of Government

• Main Authors: Fereshteh Mohammadyan, Hamid Amadeh, Abbas Shakeri
• Format: Article
• Language: fas
• Published: Allameh Tabataba'i University Press 2013-07-01
• Series: Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī
• Subjects: Introducing and Testing a New Model to Explain the Size of Government Article 5; Volume 13; Issue 49 - Serial Number 2; Summer 2013; Page 117-150 XML PDF (681.4 K) Document Type: Research Paper Authors Fereshteh Mohammadyan email 1; Hamid Amadeh2; Abbas Shakeri3 1M.Sc. Student in Environmental Economics; Faculty of Economics; Allameh Tabatabaie University 2Assistant Professor; Allameh Tabatabaie University 3Professor; Allameh Tabatabaie University Abstract This article explains the differences in size and growth of governments over time. We first divide the theories of government size into three theories relating to demand side; supply side and other theories. Then these theories are empirically tested by a conceptual model for 103 countries and selected groups of countries (Muslim and socialist countries; democracies; authoritarian countries and federal countries) during the period of 1990 to 2010. The results show that among the demand side variables; per capita income; inequality and urbanization; respectively with negative; positive and positive signs; have a significant effect on the size of government. In the case of supply side variabels; indirect taxes have a significant positive effect on the size of government. Concerning other factors (factors other than the supply and demand side variables); the three variables that are the ratio of aging population; the degree of openness of the economy and the rate of female participation in the labor market have a significant positive effect on government size. The results also show that political structure; ideological structure; Government Size; Islamic and Socialist Countries; Democratic Countries Dictatorship and the Federal Countries
• Online Access: http://joer.atu.ac.ir/article_910_8ace56c2a86f8cd0108df9660ded49ff.pdf

This article explains the differences in size and growth of governments over time. We first divide the theories of government size into three theories relating to demand side, supply side and other theories. Then these theories are empirically tested by a conceptual model for 103 countries and selected groups of countries (Muslim and socialist countries, democracies, authoritarian countries and federal countries) during the period of 1990 to 2010. The results show that among the demand side variables, per capita income, inequality and urbanization, respectively with negative, positive and positive signs, have a significant effect on the size of government. In the case of supply side variabels, indirect taxes have a significant positive effect on the size of government. Concerning other factors (factors other than the supply and demand side variables), the three variables that are the ratio of aging population, the degree of openness of the economy and the rate of female participation in the labor market have a significant positive effect on government size. The results also show that political structure, ideological structure, and presence or absence of centralization not only affect the government size but also the effect of economic variables is different when these structural factors change.