1. Liberalization, Economic Growth, and the Role of the State.
- Author
-
Kwon, Roy, Roberts, Anthony, and Salcido, Briana
- Subjects
ECONOMIC development ,PUBLIC spending ,ECONOMIC policy ,CONSUMPTION tax - Abstract
Many advocates of liberalization claim that reducing taxes and government spending promotes economic growth. In contrast, the present study claims that the positive relationship between liberalization and economic growth is only present in countries with high levels of government spending. This is due to the fact that the growth-enhancing effect of liberalization is contingent on the state's ability to create an environment that can optimize the potential benefits derived from liberal economic policies. According to the findings, liberalization is a positive predictor of economic growth in countries with above average levels of government spending. Furthermore, countries with high government spending possess a significant positive connection with economic growth, regardless of their quality of governance. These results indicate that scholars should reconsider the role of the state when exploring the relationship between liberalization and economic growth. [ABSTRACT FROM AUTHOR]
- Published
- 2019