Budgetary policy and political liberty: A cross-sectional analysis

Abstract

A sample of 67 nations is used in a cross-sectional regression analysis to study the statistical correlation of political liberty with size and internal allocation of public budget (central government). Among functional categories of expenditures the budget shares of health and social security are positively related to the level of political liberty while the opposite is true for the defense budget. Social expenditures are also positively associated with this variable. The regression are repeated for economic classifications of public expenditures. The regression results show that capital expenditures and current expenditures on goods and services are negatively associated with political liberty. The relative size of government expenditure (as a percentage of GDP) also varies systematically with the index of political liberty but the relation is nonlinear. © 1994.