We use US county level data (3,058 observations) from 1970 to 1998 to explore the relationship between economic growth and the extent of government employment at three levels: federal, state and local. We find that increases in federal, state and local government employments are all negatively...

We provide direct evidence of selective default on government debt when creditors can be identified. Using unique loan-level data, we find that local governments in China choose to default on banks that have weaker political power, as those banks have little influence over local politicians'...