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The growth of government, trust in government, and evidence on their coevolution

  • Steven Gordon
  • John Garen
  • J. R. Clark
Article
  • 53 Downloads

Abstract

The coevolution of trust in government alongside the growth of government is an aspect of research on the latter topic that has not been explored. We consider this coevolution in the context of a political economy model and a public interest view of government growth and incorporate the role of trust in government. The negative association of the growth in government with trust in government is consistent with a political economy model of government growth, rent seeking/lobbying, trust, and productivity. Though such a model is broadly consistent with the historical data since the late 1950s, we present a more econometrically sophisticated examination of the data. In particular, we recognize the difficulties of statistical inference with non-stationary data and take the appropriate steps to deal with it. There is evidence that two aspects of government size – transfer payments and regulatory activity – align with the political economy model. Specifically, we find cointegration indicating the following: a negative association between trust and lobbying activity, a negative relationship between trust and each of these two measures of government, and a positive association of trust and productivity. However, other measures of government size do not produce as robust of findings. Also, we do not find evidence of positive associations of trust and government size nor of trust and lobbying, as might be expected from a public interest view of government.

Keywords

H1 H3 H5 H6 

JEL Classification

H10 H11 H3 H41 H50 H60 

Notes

Acknowledgements

For comments and suggestions, we thank Joshua Hall, Dwight Lee, Ana Herrera, James Fackler, Amihai Glazer session participants at the Southern Economic Association meetings, the Association of Private Enterprise Education conference, and the Public Choice Society meetings, and the anonymous referees. For support, we thank the Probasco Chair of Free Enterprise at The University of Tennessee at Chattanooga, the Schnatter Institute for the Study of Free Enterprise, and the BB&T Program for the Study of Capitalism, both of the latter two at the University of Kentucky.

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Authors and Affiliations

  1. 1.Department of Economics, Gatton College of Business and EconomicsUniversity of KentuckyLexingtonUSA
  2. 2.The University of Tennessee at ChattanoogaChattanoogaUSA

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