IESET.
Hypotheses·institutional quality·initial_state_share_predicts_drift_reversal

Across liberal democracies, the country's general-government spending share at the start of the corpus window negatively predicts subsequent statist drift.

Countries that began with very high state-share (Sweden 1976 ~52%, Italy ~37%, France ~40%) have on average reverted — legislated market-pivot moves — while countries that began with relatively constrained state-share (Germany ~32%, Switzerland ~26%, Japan ~22%, Korea ~18%) have on average expanded. This is the conditional-convergence pattern applied to policy structure rather than income: positions regress toward a common median over multi-decade horizons. If the pattern holds, then the strong-form managerial-flywheel claim is wrong not because liberal democracies don't drift, but because they drift *toward* a common position from both directions, not monotonically away from a market-oriented baseline.

PARTIALengine/runs/initial_state_share_predicts_drift_reversal

partial — Direction is correct (β = -0.0233) but neither the significance threshold (p = 0.8246) nor the explanatory threshold (R² = 0.002) is met. Suggestive only.

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The evidence is suggestive but not decisive. Direction is correct (β = -0.0233) but neither the significance threshold (p = 0.8246) nor the explanatory threshold (R² = 0.002) is met.

why it matters

This matters because institutional quality claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 26 country or place units from 1976 to 2025, using a descriptive design.

what was measured
What changed
  • Initial govt spending share pct income
What we checked
  • Per decade drift slope
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

2 input datasets, 0 unresolved missing series, provenance status: reproducible hash verified.

Results

engine/runs/initial_state_share_predicts_drift_reversal
1007550250197620012025USAGBRDEUFRAITAESPNLD
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show per_decade_drift_slope across 26 sampled countries over 1976–2025.
The shapes above are stylised — none of the lines are real data.
Placeholder for initial_state_share_predicts_drift_reversal. Published chart will be generated from engine/runs/initial_state_share_predicts_drift_reversal/chart_data.json.

Pre-registration

pre-registered
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z

Across liberal democracies, the country's general-government spending share at the start of the corpus window negatively predicts subsequent statist drift. Countries that began with very high state-share (Sweden 1976 ~52%, Italy ~37%, France ~40%) have on average reverted — legislated market-pivot moves — while countries that began with relatively constrained state-share (Germany ~32%, Switzerland ~26%, Japan ~22%, Korea ~18%) have on average expanded. This is the conditional-convergence pattern applied to policy structure rather than income: positions regress toward a common median over multi-decade horizons. If the pattern holds, then the strong-form managerial-flywheel claim is wrong not because liberal democracies don't drift, but because they drift *toward* a common position from both directions, not monotonically away from a market-oriented baseline.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

PRIMARY (dispositive): cross-sectional OLS of per-decade drift slope (computed from data/derived/country_drift.json over 1976-2025, anchored at first non-zero drift entry) on initial 1976-1980 average general-government spending share (% GDP). SUPPORTED iff β < 0 AND p < 0.10 (two-sided) AND R² >= 0.20 in the primary-spec (n=25, ISR excluded as outlier per spec). PARTIAL if β < 0 but at least one of the two thresholds (p<0.10 or R²>=0.20) is missed. REFUTED if β > 0 with p < 0.10 (high- state-share countries kept expanding the state — supports the creep narrative the hypothesis denies), or if β is statistically zero AND R² < 0.05 (no signal in either direction). METHOD_VALID: drift JSON contains entries for at least 22 of 26 sample countries; WDI NY.GDP.PCAP.KD available for the same 1976-1980 (or 1995-1999 transition) window.

formal test & threshold
test:      cross_sectional_ols_drift_slope_on_initial_govt_share
threshold: PRIMARY: β < 0 AND p_two_sided < 0.10 AND R² >= 0.20 (ISR excluded)

Method

Template
descriptive
Sample
26 countries · 1976 – 2025
Evidence type
associational

Data

VariableSourceTransform
per_decade_drift_slope
outcome
constructed:from data/derived/country_drift.json (replication.py recomputes from movements/*.yaml axes_summary)tier 5
OLS slope of cumulative composite drift on year, scaled to index points per decade
initial_govt_spending_share_pct_gdp
treatment
constructed:hand-coded from OECD Economic Outlook 1976-1980 vintages + IMF GFS + national-accounts statistical yearbookstier 5
general-government total expenditure / GDP, %, averaged 1976-1980 (or earliest available 5-year window for the country)
log_initial_gdp_per_capita
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log GDP-pc constant 2015 USD at start of corpus window

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Initial state-share predicts drift reversal

Verdict: partial — Direction is correct (β = -0.0233) but neither the significance threshold (p = 0.8246) nor the explanatory threshold (R² = 0.002) is met. Suggestive only.

Primary specification (ISR excluded)

  • n = 25
  • β (initial_share) = -0.0233 per pp of GDP (SE = 0.1038, t = -0.224, two-sided p = 0.8246)
  • R² = 0.002
  • Threshold: β < 0 AND p < 0.1 AND R² ≥ 0.2

With log-GDP-pc control

  • n = 25
  • β (initial_share) = -0.0363 (p = 0.7417)
  • β (log_init_gdp_pc) = +0.8858 (p = 0.6309)
  • R² = 0.013

Secondary spec — full sample with ISR

  • n = 26
  • β (initial_share) = -0.0655 (p = 0.4848)
  • R² = 0.021

Country-level data

| Country | Initial share (% GDP) | Slope/decade | Drift obs | Movements | |---|---:|---:|---:|---:| | KOR | 18.5 | +1.954 | 50 | 11 | | ESP | 24.0 | -5.018 | 49 | 15 | | JPN | 27.0 | +3.354 | 50 | 19 | | CHE | 27.5 | -0.577 | 50 | 3 | | GRC | 29.0 | -9.690 | 50 | 14 | | AUS | 29.0 | +1.201 | 50 | 9 | | USA | 29.5 | +6.273 | 50 | 25 | | PRT | 30.0 | -8.077 | 50 | 10 | | ITA | 37.5 | -11.046 | 50 | 27 | | FIN | 37.5 | -6.597 | 47 | 12 | | NZL | 37.5 | -5.662 | 50 | 10 | | CAN | 39.5 | -6.577 | 46 | 10 | | CZE | 42.0 | -5.836 | 33 | 10 | | GBR | 42.5 | -0.432 | 50 | 21 | | DEU | 43.0 | +7.970 | 50 | 20 | | IRL | 43.0 | -0.043 | 47 | 17 | | POL | 44.0 | -1.011 | 50 | 16 | | FRA | 44.5 | -0.709 | 50 | 19 | | NOR | 46.0 | -1.484 | 50 | 9 | | AUT | 46.5 | +4.024 | 50 | 15 | | NLD | 49.0 | -6.662 | 49 | 18 | | HUN | 49.0 | -3.123 | 50 | 10 | | BEL | 51.0 | -2.617 | 50 | 14 | | DNK | 51.0 | -5.634 | 50 | 9 | | SWE | 55.5 | -0.451 | 50 | 14 | | ISR | 63.5 | -7.931 | 49 | 16 |

Method

Cross-sectional OLS, n=26 liberal democracies. Outcome = per-decade OLS slope of statist_drift composite from data/derived/country_drift.json (same outcome construction as fiscal_rule_presence_dampens_statist_drift: anchor at the first non-zero drift observation, then OLS slope × 10).

Treatment = hand-coded 1976-1980 average general-government total expenditure share of GDP (post-1989 transitions POL/CZE/HUN: 1995-1999, since pre-transition socialist-bloc data is non-comparable). Control = log GDP-pc constant 2015 USD averaged over the same window.

Primary spec excludes ISR (Israel) per the spec's own outlier flag — the 1976-1980 share of ~63.5% GDP reflects post-Yom-Kippur-War emergency spending and is far outside the range. Secondary spec keeps ISR for robustness; if signs flip between specs that's reported.

Falsification legs

  • Direction correct (β < 0): True
  • Significant at p<0.1: False
  • R² ≥ 0.2: False

Steelman live concerns

See hypotheses/steelman/initial_state_share_predicts_drift_reversal.md. Particularly relevant: (i) the corpus' policy-direction coding is itself constructed from movements that may be biased toward market-pivot framing; (ii) the 1976-1980 starting window is long after the main post-war expansion of the state — earlier baselines (1960s) would produce different rankings; (iii) regression-to-the-median in coded measures can be a Galtonian artefact rather than a substantive convergence story.

Provenance

  • data/derived/country_drift.json (built by scripts/compute_country_drift.py)
  • world_bank_wdi:NY.GDP.PCAP.KD (latest vintage on disk)
  • INITIAL_GOVT_SHARE dictionary in this script (hand-coded from spec)

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Authored framework. Read the transparency note.