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Boyd, Robert (1988). Government Involvement in the Economy and the Distribution of Income: A Cross-National Study. Population Research and Policy Review, 7, 223-238.


This study explores the effect of government involvement in the economy, as measured by central government expenditures as a percent of Gross Domestic Product (GDP), on the distribution of income. It is hypothesized that state spending — in the form of transfer payments to firms and households, government purchases, and military spending — will have a negative influence on income inequality only at high levels of economic development. Multivariate analysis confirms this hypothesis. The results show that government expenditures as a percent of GDP and level of industrialization interact to produce a negative impact on income inequality. This finding, moreover, holds up after additional investigation for possible OLS assumption violations, sample dependence of results, and model misspecification.


Reference Type

Journal Article

Year Published


Journal Title

Population Research and Policy Review


Boyd, Robert