The aim of this paper is to analyze the relation between the volatility of government consumption
and country size. Using a sample of 160 countries from 1960 to 2000 the main findings of our empirical
analysis suggest that: 1) smaller countries have more volatile non-discretionary and discretionary
government consumption, and also a more volatile government size; 2) the relation between government
spending volatility and the size of a country is more negative for more volatile economies; 3) the relation
between government consumption volatility and country size is more negative for functions of government
spending that are characterized by a high level on non-rivality. The results are robust to different time and
country samples, different econometric techniques and to several sets of control variables.
Government Consumption Volatility and the Size of Nations
Working paper
OECD Economics Department Working Papers
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