The Size and Composition of Government Expenditure

This paper tests several leading hypotheses on determinants of government expenditure. The purpose is to avoid omitted variables bias by testing the prominent theories in a comprehensive specification, to identify persistent puzzles for the current set of theories, and to explore those puzzles in greater depth by looking at the composition of government expenditure and the level of government at which it takes place as well as its magnitude. Using Global Financial Statistics data from the IMF covering over 100 countries from 1970-2000, I look at cross-sectional and inter-temporal variation in government expenditure and both individual categories of expenditure (such as defense, education, health care) and different levels of government (central, state, and local). Among other results, I find a new explanation for Wagner's Law, widespread evidence that preference heterogeneity leads to decentralization rather than outright decreases in expenditures, that a great deal of the expenditure associated with increased trade openness is not in categories that explicitly insure for risk, and evidence that both political access and income inequality affect the extent of social insurance.government expenditure, Wagner's Law

Categorical Data

A very brief survey of regression for categorical data. Categorical outcome (or discrete outcome or qualitative response) regression models are models for a discrete dependent variable recording in which of two or more categories an outcome of interest lies. For binary data (two categories) probit and logit models or semiparametric methods are used. For multinomial data (more than two categories) that are unordered, common models are multinomial and conditional logit, nested logit, multinomial probit, and random parameters logit. The last two models are estimated using simulation or Bayesian methods. For ordered data, standard multinomial models are ordered logit and probit, or count models are used if ordered discrete data are actually a count.binary data, multinomial, logit, probit, count data

The Aging Population and the Size of the Welfare State: Is There a Puzzle?

Razin, Sadka, and Swagel (2002) unveil a puzzling fact: the welfare state appears to be shrinking even as the dependency ratio rises. While they formulate an elegant political economy model to explain the coexistence of an aging population and declining transfers, the resolution of the puzzle turns out to be much simpler. Labor tax rates and per capita transfers are negatively correlated with the dependency ratio in advanced economies only because this measure includes children as well as retirees. Both labor tax rates and per capita transfers in advanced economies are, in fact, historically positively correlated with the ratio of retirees to the working-age population and negatively correlated with the ratio of children to the working-age population. Increasing the number of retirees shifts preferences toward higher taxes and transfers by increasing the fraction of the population that receives transfers. In contrast, workers with more children prefer to spend more of their lifetime income while raising dependents, so they prefer smaller public pension systems. These results suggest that fiscal leakage from workers to retirees is not required to explain the broad trends in the transfer policies of advanced economies.dependency ratio, welfare state

The auxiliary region method: A hybrid method for coupling PDE- and Brownian-based dynamics for reaction-diffusion systems

Reaction-diffusion systems are used to represent many biological and physical phenomena. They model the random motion of particles (diffusion) and interactions between them (reactions). Such systems can be modelled at multiple scales with varying degrees of accuracy and computational efficiency. When representing genuinely multiscale phenomena, fine-scale models can be prohibitively expensive, whereas coarser models, although cheaper, often lack sufficient detail to accurately represent the phenomenon at hand. Spatial hybrid methods couple two or more of these representations in order to improve efficiency without compromising accuracy. In this paper, we present a novel spatial hybrid method, which we call the auxiliary region method (ARM), which couples PDE and Brownian-based representations of reaction-diffusion systems. Numerical PDE solutions on one side of an interface are coupled to Brownian-based dynamics on the other side using compartment-based "auxiliary regions". We demonstrate that the hybrid method is able to simulate reaction-diffusion dynamics for a number of different test problems with high accuracy. Further, we undertake error analysis on the ARM which demonstrates that it is robust to changes in the free parameters in the model, where previous coupling algorithms are not. In particular, we envisage that the method will be applicable for a wide range of spatial multi-scales problems including, filopodial dynamics, intracellular signalling, embryogenesis and travelling wave phenomena.Comment: 29 pages, 14 figures, 2 table

The spatial variation of Asian dust and marine aerosol contributions to glaciochemical signals in central Asia

Short-term (6 months to 17 years) glaciochemical records have been collected from several glacier basins in the mountains of central Asia. The spatial distribution of snow chemistry in central Asia is controlled by the influx of dust from the large expanse of arid and semiarid regions in central Asia. Glaciers in the Northern and Western Tibetan Plateau show elevated concentrations and elevated annual fluxes of calcium, sodium, chloride, sulphate and nitrate due to the influx of desert dust from nearby arid and semi-arid regions. Glaciers in the Southeastern Tibetan Plateau show lower concentrations and lower annual fluxes of major ions due to longer transport distances of dust from the arid and semi-arid regions of Western China. Snow from the Karakoram and Western Himalaya show ion concentrations similar to those in Southeastern Tibetan Plateau, but much higher annual fluxes suggesting that much of the aerosol and moisture transported with the westerly jet stream is removed as it ascends the Southwest margin of the Tibetan Plateau. Snow from the Southern slopes of the Eastern Himalayas shows very low concentrations and very low annual fluxes of major ions, indicating that this region is relatively free from the chemical influence of Asian dust. The glaciochemical data suggest that glaciers which are removed from large source areas of mineral aerosol, such as those in the Himalaya, the Karakoram, and the Southeastern Tibetan Plateau, are the ones most likely to contain longer-term glaciochemical records which detail annual to decadal variation in the strength of the Asian monsoon and long-range transport of Asian dust