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.
Inhaltsverzeichnis (Table of Contents)
- 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)
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to investigate the relationship between globalization, government expenditure, and the government's credible commitments. The study explores the hypothesis that nations increase social spending to garner support for greater economic openness. This research draws on the literature concerning compensation hypothesis, efficiency hypothesis, and credible commitment hypothesis.
- The impact of globalization on social welfare spending
- The relationship between social expenditure and economic openness
- The role of government in facilitating economic globalization
- The compensation hypothesis and its implications
- The theoretical framework of credible commitment
Zusammenfassung der Kapitel (Chapter Summaries)
The paper begins with an introduction outlining the context of globalization and the evolving relationship between government and markets. It explores the concept of "embedded liberalism" and how governments might play a role in promoting flexible markets through social insurance policies and economic stabilization. This section also highlights the connection between trade openness and the size of the public sector.
The literature review further examines the determinants of individual trade policy choices and explores the political economy of globalization. This section explores the "compensation hypothesis" which suggests that voters pressure governments for increased social insurance to mitigate the risks associated with globalization.
The theoretical framework delves into three key hypotheses: the compensation theory, the efficiency theory, and the credible commitment theory. These frameworks are essential for understanding the dynamics between social spending, economic openness, and the government's role in managing these relationships.
The research design and methodology section outlines the data sources, variables used in the study, and the research methodology. This section details the operationalization of variables, including social expenditure as the independent variable, openness of the economy as the dependent variable, and control variables. It also provides an overview of the data analysis techniques used.
Schlüsselwörter (Keywords)
The paper focuses on key concepts like globalization, government expenditure, credible commitments, social spending, economic openness, compensation hypothesis, efficiency hypothesis, credible commitment hypothesis, embedded liberalism, and empirical research methodology. These themes underpin the study's exploration of the relationship between government policies and economic globalization.
- Citar trabajo
- Bele Krüger (Autor), 2017, Economic Openness. Social Expenditure and Credible Commitments, Múnich, GRIN Verlag, https://www.grin.com/document/383258
