We examine whether trade openness influences government size. Using panel data, we find no evidence of a positive relationship. Rather, causality tests show that larger government size leads to lower openness, the opposite of what Rodrik [Rodrik, Dani, 1998, Why do more open economies have...

We calibrate a two-sector span-of-control model and show that size-dependent labor regulations generate the observed employment distribution across manufacturing establishments in India. We find that such regulations in manufacturing reduce productivity in agriculture and impede the process of...