Globalisation and government spending: evidence for the ‘hyper-globalisation’ of the 1990s and 2000s

Anderson, Edward and Obeng, Samuel (2020) Globalisation and government spending: evidence for the ‘hyper-globalisation’ of the 1990s and 2000s. The World Economy. ISSN 0378-5920

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Abstract

In this paper, we provide an up-to-date empirical assessment of the relationship between economic globalisation and government spending for the ‘hyper-globalisation’ period of the 1990s and 2000s. We use data on government consumption spending and more disaggregated spending components (e.g., social welfare). We also use a range of globalisation measures, including the most recent version of the KOF globalisation index, and a combination of econometric methods, including fixed-effects and instrumental variable (IV) estimation. The results suggest that hyper-globalisation has had divergent and conflicting effects on consumption spending: while de jure trade globalisation has tended to raise spending, de jure financial globalisation has tended to reduce it. We also find evidence that the positive effect of de facto trade globalisation on spending weakened significantly during the 1990s and 2000s, in comparison with earlier decades. These effects could have contributed to the growing political backlash witnessed against globalisation since the early 2000s.

Item Type: Article
Uncontrolled Keywords: globalisation,government spending,hyper-globalisation,instrumental variables,accounting,finance,economics and econometrics,political science and international relations ,/dk/atira/pure/subjectarea/asjc/1400/1402
Faculty \ School: Faculty of Social Sciences > School of International Development
Faculty of Social Sciences > School of Economics
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Depositing User: LivePure Connector
Date Deposited: 09 Sep 2020 00:03
Last Modified: 02 Apr 2021 01:34
URI: https://ueaeprints.uea.ac.uk/id/eprint/76806
DOI: 10.1111/twec.13035

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