Exogenous volatility and the size of government in developing countries

• 成果类型: Article
• 署名作者: Brueckner, Markus; Gradstein, Mark
• 署名单位: National University of Singapore; Ben-Gurion University of the Negev
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2013.08.005
• 发表日期: 2013
• 页码: 254-266
• 关键词: volatility; Government size; rainfall

摘要

This paper presents instrumental variables estimates of the effects of GDP per capita volatility on the size of government. We show that for a panel of 157 countries spanning more than half a century, rainfall volatility has a significant positive effect on GDP per capita volatility in countries with above median temperatures. In these countries rainfall volatility has also a significant positive reduced-form effect on the GDP share of government. There is no significant reduced-form effect in the sample of countries with below median temperatures where rainfall volatility has no significant effect on GDP per capita volatility. Using rainfall volatility as an instrumental variable in the sample of countries with above median temperatures yields that greater GDP per capita volatility leads to a significantly higher GDP share of government. (C) 2013 Elsevier B.V. All rights reserved.