25
Country Classifications and Government Policies

I have shown that inflation variability and government consumption growth are consistently negative and significant variables in OECD economic growth models. I have also argued that the direct evidence for the importance of bargaining arrangements or union density or corporatist governance is rather weak. Here I investigate whether centralized and decentralized


TABLE 25.1. Does Centralization have Indirect Effects on Economic Growth?
Country
type
Investment Growth of
government
consumption
Variability of
inflation
Mean Std.
dev.
Mean Std.
dev.
Mean Std.
dev.
High
(N = 32)
26.76 5.10 0.0030 0.0175 0.0482 0.0402
Medium
(N = 72)
24.97 53.23 -0.0032 0.0155 0.0543 0.0413
Low
(N = 32)
24.19 6.14 -0.0083 0.0188 0.0414 0.0463
Excluded
(N = 56)
23.89 4.82 0.0057 0.0237 0.0773 0.0574
H0: Investment in high and low centralization countries is the same.
t-statistics = 1.82 (0.08)
H0: Growth of gov't in high and low centralization countries is the
same.
t-statistic = 2.49(0.02)
H0: Inflation variability is the same in the excluded and included
countries.
t-statistics = 3.66 (0.01)

-175-

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