This paper discusses different empirical tests of public sector solvency and applies them to a sample of 18 OCED countries. Provided that the government solvency constraint need to be imposed, these tests develop from the idea of verifying whether the intertemporal budget constraint of the...

The sizeable fiscal consolidation required to stabilize the debt-to-GDP ratios in several countries in the aftermath of the global crisis raises a crucial question on its feasibility. To answer this question, we rely on historical evidence from a sample of 91 adjustment episodes of countries...

Trends in the size of U.S. government are examined. In the postwar period, general government primary spending rose by 1⁄4 percent of GDP a year through 1975, stabilizing thereafter. With higher social transfers offset by a lower burden of defense spending, expansion reflected a baby-boom...

The common-pool problem is a central issue in the relationship between the political structure of jurisdictions and the size of public spending. Models predict that, other things being equal, greater political districting of a jurisdiction raises the scale of government. This paper presents new...

We provide a model for analyzing effects of the tax system and spending programs on the determination of government spending and taxpayer welfare and show that tax system or spending program which is suboptimal from a Ramsey point of view can improve taxpayer welfare because the system creates...

This paper demonstrates that there is a robust empirical association between the extent to which an economy is exposed to trade and the size of its government sector. This association holds for a large cross-section of countries, in low- as well as high-income samples, and is robust to the...