IESET.
Hypotheses·fiscal·redistribution_public_consumption_tfp_drag_pwt_panel

Across a broad country panel from 1990 to 2019, larger government final consumption shares predict slower total factor productivity growth after country and year fixed effects, human-capital controls, trade openness, investment share, and rule of law.

The mechanism is that redistribution-heavy public consumption can protect current incomes while weakening capital reallocation, firm discipline, and productivity growth relative to market-led income growth.

SUPPORTEDengine/runs/redistribution_public_consumption_tfp_drag_pwt_panel

SUPPORTED — coef=-0.011 (sign matches claim -), p=0.0101

confidence cueThis is a clear pass for the claim as written. It still applies only to this sample, period, and method.

policy briefNeeds review

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 data clearly moved in the predicted direction. coef=-0.011 (sign matches claim -), p=0.0101

why it matters

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

how the test works

It compares 53 country or place units from 1990 to 2019, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Government consumption share
What we checked
  • Total factor productivity growth
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

No evidence packet has been generated yet.

Results

engine/runs/redistribution_public_consumption_tfp_drag_pwt_panel
1007550250199020052019ARGAUSAUTBELBRACANCHE
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show total_factor_productivity_growth across 53 sampled countries over 1990–2019.
The shapes above are stylised — none of the lines are real data.
Placeholder for redistribution_public_consumption_tfp_drag_pwt_panel. Published chart will be generated from engine/runs/redistribution_public_consumption_tfp_drag_pwt_panel/chart_data.json.

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:52:33Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

Across a broad country panel from 1990 to 2019, larger government final consumption shares predict slower total factor productivity growth after country and year fixed effects, human-capital controls, trade openness, investment share, and rule of law. The mechanism is that redistribution-heavy public consumption can protect current incomes while weakening capital reallocation, firm discipline, and productivity growth relative to market-led income growth.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Supported if government_consumption_share is negative at p <= 0.10 in the annual and three-year-smoothed specifications. Refuted if it is positive at p <= 0.10 in either primary specification. Null estimates are partial.

formal test & threshold
test:      panel_fe_public_consumption_tfp_drag
threshold: [object Object]

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
53 countries · 1990 – 2019
Evidence type
associational

Two-way fixed effects using annual PWT TFP growth. Report a three-year moving-average robustness check because TFP is noisy at annual frequency. The investment-share control helps distinguish pure fiscal drag from capital-deepening channels.

Data

VariableSourceTransform
total_factor_productivity_growth
outcome
pwt:rtfpnatier 3
annual_log_change
government_consumption_share
treatment
world_bank_wdi:NE.CON.GOVT.ZStier 2
level
human_capital_index
control
pwt:hctier 3
level
capital_stock_per_worker
control
pwt:rknatier 3
log
gross_capital_formation_share
control
world_bank_wdi:NE.GDI.TOTL.ZStier 2
level
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
rule_of_law
control
wgi:RL.ESTtier 4
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — redistribution_public_consumption_tfp_drag_pwt_panel

Verdict: SUPPORTED — coef=-0.011 (sign matches claim -), p=0.0101

Pre-registration

  • Claim: Across a broad country panel from 1990 to 2019, larger government final consumption shares predict slower total factor productivity growth after country and year fixed effects, human-capital controls, trade openness, investment share, and rule of law. The mechanism is that redistribution-heavy public consumption can protect current incomes while weakening capital reallocation, firm discipline, and productivity growth relative to market-led income growth.
  • Falsification rule: Supported if government_consumption_share is negative at p <= 0.10 in the annual and three-year-smoothed specifications. Refuted if it is positive at p <= 0.10 in either primary specification. Null estimates are partial.
  • Falsification test: panel_fe_public_consumption_tfp_drag

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): -0.011
  • Std error: 0.004268
  • p-value: 0.0101
  • Observations: 903, countries: 43
  • Within R²: 0.439
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • pwt:rtfpna → total_factor_productivity_growth (outcome, publisher=pwt, n=6407)
  • world_bank_wdi:NE.CON.GOVT.ZS → government_consumption_share (treatment, publisher=world_bank_wdi, n=9133)
  • pwt:hc → human_capital_index (controls, publisher=pwt, n=8637)
  • pwt:rkna → capital_stock_per_worker (controls, publisher=pwt, n=7095)
  • world_bank_wdi:NE.GDI.TOTL.ZS → gross_capital_formation_share (controls, publisher=world_bank_wdi, n=10428)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)
  • wgi:RL.EST → rule_of_law (controls, publisher=wgi, n=5296)

Generated by scripts/run_panel_fe.py at 2026-06-29T17:52:33+00:00

Strongest opposing argument

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

Notes

This is a productivity-mechanism candidate rather than a welfare verdict. It can be refuted by high-tax systems that sustain TFP growth after controls.

Authored framework. Read the transparency note.