01894cam a22002537 4500001000600000003000500006005001700011008004100028100001800069245009500087260006600182490004100248500001600289520083300305530006101138538007201199538003601271690008201307690007001389710004201459830007601501856003701577856002601614w5537NBER20140712065708.0140712s1996 mau||||fs|||| 000 0 eng d1 aRodrik, Dani.10aWhy Do More Open Economies Have Bigger Governments?h[electronic resource] /cDani Rodrik. aCambridge, Mass.bNational Bureau of Economic Researchc1996.1 aNBER working paper seriesvno. w5537 aApril 1996.3 aThis 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 inclusion of a wide range of controls. The explanation appears to be that government consumption plays a risk-reducing role in economies exposed to a significant amount of external risk. When openness is interacted with explicit measures of external risk, such as terms-of-trade uncertainty and product concentration of exports, it is the interaction terms that enter significantly, and the openness term loses its significance (or turns negative). The paper also demonstrates that government consumption is the majority of countries. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aH1 - Structure and Scope of Government2Journal of Economic Literature class. 7aF15 - Economic Integration2Journal of Economic Literature class.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w5537.4 uhttp://www.nber.org/papers/w5537 uurn:doi:10.3386/w5537