Consolidated democracy and size of the State

Abstract

Common sense suggests that the more consolidated democracies and advanced economies tend to be more efficient and produce smaller states. What is observed in practice, however, is a positive correlation between "democratic consolidation" and "tax burden" (as a proxy for "size of government"). This finding, while not expressing any causal relationship between the two variables, is an evidence that a more republican and democratic State, as defined in Bresser-Pereira, must be able to provide, effectively and efficiently, broader public services with better quality. This is, in consolidated democracies, the State should not be small.

JEL Classification: H10; H11; O43.