Economic growth,repression, and state expenditure in non-democratic regimes |
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Institution: | 1. Department of Finance, Goethe University Frankfurt, Grueneburgplatz 1, 60323 Frankfurt am Main, Germany;2. Department of Economics, University of Leicester, Leicester, UK;3. CFS, Frankfurt am Main, Germany;1. University of the Basque Country, School of Economics, Av. Lehendakari Aguirre 83, 48015 Bilbao, Spain;2. University of Heidelberg, Department of Economics, Bergheimer Str. 58, 69115 Heidelberg, Germany |
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Abstract: | This paper examines how economic growth affects government spending in non-democracies. A robust finding is that positive growth induces a significant increase in defence spending but a decrease in non-defence spending in dictatorships, with little effect in democracies. Government spending is slightly sensitive to negative growth across regimes. Higher growth rate in a country than its neighbours induces more spending than their average. Corruption causes a reduction in defence spending but an increase in non-defence spending. Primary education stimulates non-defence spending but reduces defence expenditure, secondary education causing the opposite effect. An under-developed country spends less than a developed country. |
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