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Integration and the Structure of Public Spending

Author

Summary, in English

he voluminous tax competition literature suggests that increased economic integration leads to reduced tax rates and suboptimal levels of government spending as countries compete for mobile factors of production. Integration may influence not only the size of the government but also the structure of public spending. Comprehensive studies analyzing the effect of integration on the overall structure of government spending are rare, however. This article fills this void by providing an empirical analysis of the effects of economic integration on the overall structure of public spending in a number of Organisation for Economic Co-operation and Development countries using panel data on the different government spending components for the period 1970 to 2002. The authors find that integration negatively influences government consumption and investment but that there is no empirical evidence that transfers are positively or negatively affected by integration, as suggested by the compensation and efficiency views, respectively.

Publishing year

2008

Language

English

Pages

1001-1027

Publication/Series

Comparative Political Studies

Volume

41

Issue

7

Document type

Journal article

Publisher

SAGE Publications

Topic

  • Economics

Keywords

  • economic integration
  • the structure of public spending
  • tax competition

Status

Published

ISBN/ISSN/Other

  • ISSN: 1552-3829