Abstract

MATUTE PACHECO, Juan B.. Explanatory factors of public sector growth. The case of Ecuador 1983-2016. Revista Economía y Política [online]. 2019, n.30, pp.174-200.  Epub July 03, 2019. ISSN 2477-9075.

The following research examines the determining factors of the growth of the public sector in Ecuador in the period between 1983-2016, using five explanatory theories: Wagner's Law, economic internationalization, bureaucracy, fiscal illusion and political party ideology. The results reveal strong evidence that the growth of the public sector in Ecuador is linked political and institutional factors such as the the governing party's ideology and the effects of bureaucracy on the democratic system. On the opposite side of the spectrum, partial support for Wagner's Law and economic internationalization was found and no support for the theory that the growth of the public sector is due to fiscal illusion created by the tax system. The comparative analysis between countries presents evidence that the size of the public sector in Ecuador is oversized in relation to countries with similar levels of development.

Keywords : Economic growth; Fiscal illusion; institutions; public sector; Wagner’s law.

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