The Effects of Capital Mobility, Trade Openness, and Democracy on Social Spending in Latin America, 1980-1999

George Avelino · David S. Brown · Wendy Hunter

395 citations0/0 files storedAmerican Journal of Political Science

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Social Policy and Reform Studies Economic and Fiscal Studies Fiscal Policies and Political Economy

Abstract

Empirical studies measuring the impact of globalization on social spending have appeared recently in leading journals. This study seeks to improve upon previous work by (1) employing a more sophisticated and comprehensive measure of financial openness; (2) using a more accurate measure of trade openness based on purchasing power parities; and (3) relying on social spending data that are more complete than those used by previous studies on Latin America. Our estimates suggest that several empirical patterns reported in previous work deserve a second look. We find that trade openness has a positive association with education and social security expenditures, that financial openness does not constrain government outlays for social programs, and that democracy has a strong positive association with social spending, particularly on items that bolster human capital formation.

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References

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2014Democracy, Redistribution, and Inequality 2013Who Benefits from Distributive Politics? How the Outcome One Studies Affects the Answer One Gets 2009Social Policy in Developing Countries 2008Politics and Social Spending in Latin America 2007Welfare States in Developing Countries: Unique or Universal?2007The impact of globalization on the composition of government expenditures: Evidence from panel data

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