Are Bigger Governments Better Providers of Public Goods? Evidence from Air Pollution

Public Choice 156/3: 593–609.

Posted: 5 Dec 2017 Last revised: 12 Dec 2017

See all articles by Thomas Bernauer

Thomas Bernauer

ETH Zurich

Vally Koubi

University of Bern - Department of Economics

Date Written: September 1, 2013

Abstract

Theories explaining government size and its consequences are of two varieties. The first portrays government as a provider of public goods and a corrector of externalities. The second associates larger governments with bureaucratic inefficiency and special-interest-group influence. What distinguishes these alternatives is that only in the former is governmental expansion generally associated with an increase in social welfare. In the latter, the link between government size and public goods provision (or social welfare) is negative. We study the empirical significance of these competing claims by examining the relationship between government size and a particular public good, namely environmental quality (notably, air quality measured by SO2 concentrations), for 42 countries over the period 1971–1996. We find that the relationship is negative, even after accounting for the quality of government (quality of bureaucracy and the level of corruption). This result may not prove conclusively that the growth of government has been driven by factors other than concern for the public good, but it creates a presumption against the theory of government size that emphasizes public good provision.

Keywords: Government size, Public goods, Corruption, Government quality, Environmental quality, SO2 concentrations

Suggested Citation

Bernauer, Thomas and Koubi, Vally, Are Bigger Governments Better Providers of Public Goods? Evidence from Air Pollution (September 1, 2013). Public Choice 156/3: 593–609.. Available at SSRN: https://ssrn.com/abstract=3080336

Thomas Bernauer (Contact Author)

ETH Zurich ( email )

Center for Comparative and International Studies
Building IFW, office 45.1, Haldeneggsteig 4
Zurich 8092, 8092
Switzerland
+41 44 632 6466 (Phone)
+41 44 632 1289 (Fax)

HOME PAGE: http://www.ib.ethz.ch

Vally Koubi

University of Bern - Department of Economics ( email )

Schanzeneckstrasse 1
Bern, CH-3001
Switzerland

Register to save articles to
your library

Register

Paper statistics

Abstract Views
88
PlumX Metrics