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The Effects of Capital Mobility, Trade Openness, and Democracy on Social Spending in Latin America, 1980–1999

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  • George Avelino
  • David S. Brown
  • Wendy Hunter

Abstract

Empirical studies measuring the impact of globalization on social spending have appeared recently in leading journals. This study seeks to improve upon previous work by (1) employing a more sophisticated and comprehensive measure of financial openness; (2) using a more accurate measure of trade openness based on purchasing power parities; and (3) relying on social spending data that are more complete than those used by previous studies on Latin America. Our estimates suggest that several empirical patterns reported in previous work deserve a second look. We find that trade openness has a positive association with education and social security expenditures, that financial openness does not constrain government outlays for social programs, and that democracy has a strong positive association with social spending, particularly on items that bolster human capital formation.

Suggested Citation

  • George Avelino & David S. Brown & Wendy Hunter, 2005. "The Effects of Capital Mobility, Trade Openness, and Democracy on Social Spending in Latin America, 1980–1999," American Journal of Political Science, John Wiley & Sons, vol. 49(3), pages 625-641, July.
    • Handle: RePEc:wly:amposc:v:49:y:2005:i:3:p:625-641
    DOI: 10.1111/j.1540-5907.2005.00146.x
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    References listed on IDEAS

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    1. Birdsall, Nancy & Londoño de la Cuesta, Juan Luis & O'Connell, Lesley, 1998. "Education in Latin America: demand and distribution are factors that matter," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
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