The aim of this paper is to study the relationship between globalization, government expenditure and credible commitments of the government.
Moreover, the hypothesis that states increase social spending to build support for increasing economic openness was tested. The study is deeply grounded in an extensive literature on the research works in the related area and on compensation hypothesis, efficiency hypothesis, and credible commitment hypothesis. An empirical analysis of economic and social data of twenty-three OECD countries was performed for the period between 1960 and 2013 to test the hypothesis.
The hypothesis, more government expenditure leads to greater globalization was not rejected. Hence, it was proved by empirical investigation that more social expenditure leads to more economic openness.
Inhalt
List of Tables
List of figures
Abstract
Section 1: Introduction
Section 2: Literature review
2.1. Embedded Liberalism
2.2. Credible Commitment and the nature of government
Section 3: Theoretical Framework
3.1. Compensation Theory
3.2. Efficiency theory
3.3. Credible commitment theory
Section 4: Research design and methodology
4.1. Data Source
4.2. Data Operationalization
4.2.1. Independent variable: Social expenditure
4.2.2. Dependent variable: Openness of the economy
4.2.3. Control variables
4.3. Research Methodology
Section 5: Data Analysis and Results
5.1. Ordinary least square Regression analysis
5.2. Diagnostic tests
5.2.1. Test for normality
5.2.2. Regression output (Newey-West correction)
Section 6: Conclusion
Reference List
- Quote paper
- Bele Krüger (Author), 2017, Economic Openness. Social Expenditure and Credible Commitments, Munich, GRIN Verlag, https://www.grin.com/document/383258
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