IESET.
Hypotheses·fiscal·state_size_reduces_household_income_growth

Across the OECD 38, over 2000-latest, larger general government final consumption as a share of GDP is associated with slower growth in real household disposable income per capita, controlling for demographics, initial-income level, energy-price exposure, and trade openness.

The quantitative claim is that a 1-percentage-point higher share of general government consumption in GDP is associated with roughly 0.05 to 0.20 percentage points lower annual growth in real household income per capita, conditional on controls, with the relationship holding across (a) pooled cross-section, (b) two-way fixed-effects panel, and (c) synthetic-control event studies around Milei 2023 Argentina, Thatcher 1979 UK, Chávez 1999 Venezuela, and Balcerowicz 1990 Poland — four pre-registered policy pivots spanning the state-shrinks and state-grows directions. The hypothesis is an empirical test of a "state size effect on household income," pre-registering the sign, magnitude, and triangulation strategy so that a null or reversed finding forces a corresponding update on the market-liberal prior.

PARTIALengine/runs/state_size_reduces_household_income_growth

PARTIAL — coef=-1.248e-17, p=0.809; effect magnitude effectively zero

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. coef=-1.248e-17, p=0.809; effect magnitude effectively zero

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 40 country or place units from 2000 to 2023, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • General government consumption pct income
What we checked
  • Real household disposable income pc growth
  • Real income per capita 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/state_size_reduces_household_income_growth
1007550250200020122023AUSAUTBELCANCHLCOLCRI
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show real_household_disposable_income_pc_growth across 40 sampled countries over 2000–2023.
The shapes above are stylised — none of the lines are real data.
Placeholder for state_size_reduces_household_income_growth. Published chart will be generated from engine/runs/state_size_reduces_household_income_growth/chart_data.json.

Who has skin in the game — schools predicting on this

17 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Austrian Business Cycle Theory (ABCT)wins if SUPPORTEDpartial/no-callChicago School Monetarismwins if SUPPORTEDpartial/no-callClassical Liberalwins if SUPPORTEDpartial/no-callDegrowth / Ecological Macroeconomicswins if REFUTEDpartial/no-callDemocratic Socialism (Bernsteinian revisionism + modern)wins if REFUTEDpartial/no-callStructuralist / Developmentalistwins if MIXEDpartial/no-callEco-Socialism / Red-Greenwins if REFUTEDpartial/no-callEmpirical Pragmatist (the framework's house position)wins if MIXEDpartial/no-callNew Institutional Economicswins if MIXEDpartial/no-callMarket Socialism (Lange-Lerner tradition)wins if REFUTEDpartial/no-callMarxian Political Economywins if REFUTEDpartial/no-callMarxism-Leninism (central-planning implementation)wins if REFUTEDpartial/no-callModern Monetary Theorywins if REFUTEDpartial/no-callNew Keynesian (mainstream synthesis)wins if MIXEDpartial/no-callOrdoliberalism (Freiburg School)wins if SUPPORTEDpartial/no-callPost-Keynesianwins if REFUTEDpartial/no-callSocial Democraticwins if REFUTEDpartial/no-call

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:52:35Z
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 the OECD 38, over 2000-latest, larger general government final consumption as a share of GDP is associated with slower growth in real household disposable income per capita, controlling for demographics, initial-income level, energy-price exposure, and trade openness. The quantitative claim is that a 1-percentage-point higher share of general government consumption in GDP is associated with roughly 0.05 to 0.20 percentage points lower annual growth in real household income per capita, conditional on controls, with the relationship holding across (a) pooled cross-section, (b) two-way fixed-effects panel, and (c) synthetic-control event studies around Milei 2023 Argentina, Thatcher 1979 UK, Chávez 1999 Venezuela, and Balcerowicz 1990 Poland — four pre-registered policy pivots spanning the state-shrinks and state-grows directions. The hypothesis is an empirical test of a "state size effect on household income," pre-registering the sign, magnitude, and triangulation strategy so that a null or reversed finding forces a corresponding update on the market-liberal prior.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if the estimated coefficient on general government consumption / GDP (primary IV) in the two-way FE panel (primary estimator) is (a) positive at any conventional significance level, OR (b) negative but with p > 0.10, OR (c) negative and significant but with an absolute magnitude smaller than 0.05 percentage points of HH-income-growth per 1 percentage point of state size. In addition, the hypothesis is weakened if the synthetic-control triangulation produces opposite-signed effects in ≥ 2 of the 4 pre-registered pivots — a single dissenting pivot is compatible with the hypothesis (measurement error, case-specific confounders) but two or more is a meaningful refutation signal.

formal test & threshold
test:      state_size_coefficient_triangulated_across_three_estimators
threshold: β_gov_cons_share (panel FE, primary outcome) <= -0.0005 per 1pp (i.e. ≤ −0.05 ppt income-growth per 1pp state size) at p <= 0.10  AND cross_section_coefficient sign matches panel FE sign  AND synthetic_control_pivots_agreement_count >= 3 of 4  (≥ 3 pivots show sign consistent with hypothesis)

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
40 countries · 2000 – 2023
Evidence type
causal

Triangulation across three estimators (all pre-registered): (1) Pooled cross-section: country-average state-size vs country-average HH-income growth over 2000-2019 (pre-COVID window), with the full control set. Reports the raw partial correlation with heteroskedasticity-robust SEs. (2) Two-way FE panel: annual observations with country and year FE, Driscoll-Kraay SEs clustered by country. Identifies the within- country association after absorbing time-invariant country heterogeneity and global common shocks. (3) Synthetic-control event studies around four pre-registered policy pivots: Milei 2023 Argentina (state-shrinks direction), Thatcher 1979 UK (state-shrinks direction), Chávez 1999 Venezuela (state- grows direction), Balcerowicz 1990 Poland (state-shrinks direction). Each treated unit is matched to a donor pool of level-comparable non-pivot economies and the synthetic-minus- treated HH-income trajectory is reported over the 10-year post-pivot window. Pre-trend RMSPE reported; placebo permutation p-values reported. The three estimators probe different identifying assumptions. A clean finding requires the sign and approximate magnitude to line up across at least two of the three. A split result (e.g. panel FE supports, synthetic control does not) is reported as a split and not resolved in favour of either. Known limitations: (a) General government consumption / GDP is a coarse state-size proxy; it excludes transfer payments and public investment. A v2 with broader fiscal aggregates is planned. (b) Reverse causality: slow-growth economies may expand the state sector counter-cyclically. The two-way FE and the event-study design each attack this from different angles but do not eliminate it. (c) Milei 2023 synthetic control has only ~2 years of post-treatment data as of the 2026 vintage; that synthetic is pre-registered but flagged as preliminary.

Data

VariableSourceTransform
real_household_disposable_income_pc_growth
outcome
constructed:OECD national accounts HH disposable income per capita real (fallback: world_bank_wdi:NY.GDP.PCAP.KD deflated). Specialitier 5
annual_log_change
real_gdp_per_capita_growth
outcome
world_bank_wdi:NY.GDP.PCAP.KDtier 2
annual_log_change
general_government_consumption_pct_gdp
treatment
world_bank_wdi:NE.CON.GOVT.ZStier 2
level
log_initial_gdp_per_capita_ppp
control
world_bank_wdi:NY.GDP.PCAP.PP.KDtier 2
log_initial_period_level
working_age_population_share
control
world_bank_wdi:SP.POP.1564.TO.ZStier 2
level
log_population
control
world_bank_wdi:SP.POP.TOTLtier 2
log
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
energy_import_exposure
control
world_bank_wdi:EG.IMP.CONS.ZStier 2
level
debt_to_gdp
control
imf:GGXWDG_NGDPtier 2
level
wgi_government_effectiveness
control
wgi:GOV_WGI_GE.ESTtier 4
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — state_size_reduces_household_income_growth

Verdict: PARTIAL — coef=-1.248e-17, p=0.809; effect magnitude effectively zero

Pre-registration

  • Claim: Across the OECD 38, over 2000-latest, larger general government final consumption as a share of GDP is associated with slower growth in real household disposable income per capita, controlling for demographics, initial-income level, energy-price exposure, and trade openness. The quantitative claim is that a 1-percentage-point higher share of general government consumption in GDP is associated with roughly 0.05 to 0.20 percentage points lower annual growth in real household income per capita, conditional on controls, with the relationship holding across (a) pooled cross-section, (b) two-way fixed-effects panel, and (c) synthetic-control event studies around Milei 2023 Argentina, Thatcher 1979 UK, Chávez 1999 Venezuela, and Balcerowicz 1990 Poland — four pre-registered policy pivots spanning the state-shrinks and state-grows directions. The hypothesis is an empirical test of a "state size effect on household income," pre-registering the sign, magnitude, and triangulation strategy so that a null or reversed finding forces a corresponding update on the market-liberal prior.
  • Falsification rule: Not supported if the estimated coefficient on general government consumption / GDP (primary IV) in the two-way FE panel (primary estimator) is (a) positive at any conventional significance level, OR (b) negative but with p > 0.10, OR (c) negative and significant but with an absolute magnitude smaller than 0.05 percentage points of HH-income-growth per 1 percentage point of state size. In addition, the hypothesis is weakened if the synthetic-control triangulation produces opposite-signed effects in ≥ 2 of the 4 pre-registered pivots — a single dissenting pivot is compatible with the hypothesis (measurement error, case-specific confounders) but two or more is a meaningful refutation signal.
  • Falsification test: state_size_coefficient_triangulated_across_three_estimators

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): -1.248e-17
  • Std error: 5.166e-17
  • p-value: 0.809
  • Observations: 735, countries: 33
  • Within R²: 1
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • world_bank_wdi:NY.GDP.PCAP.KD → real_gdp_per_capita_growth (outcome, publisher=world_bank_wdi, n=12104)
  • world_bank_wdi:NE.CON.GOVT.ZS → general_government_consumption_pct_gdp (treatment, publisher=world_bank_wdi, n=9133)
  • world_bank_wdi:NY.GDP.PCAP.PP.KD → log_initial_gdp_per_capita_ppp (controls, publisher=world_bank_wdi, n=8325)
  • world_bank_wdi:SP.POP.1564.TO.ZS → working_age_population_share (controls, publisher=world_bank_wdi, n=16965)
  • world_bank_wdi:SP.POP.TOTL → log_population (controls, publisher=world_bank_wdi, n=14447)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)
  • world_bank_wdi:EG.IMP.CONS.ZS → energy_import_exposure (controls, publisher=world_bank_wdi, n=5804)
  • imf:GGXWDG_NGDP → debt_to_gdp (controls, publisher=imf, n=8113)
  • wgi:GOV_WGI_GE.EST → wgi_government_effectiveness (controls, publisher=wgi, n=5168)

Variables missing data

  • constructed: OECD national accounts HH disposable income per capita real (fallback: world_bank_wdi:NY.GDP.PCAP.KD deflated). Specialist OECD SNA fetcher pending for the HH-specific series; WDI GDP-pc-constant used as v1 fallback with a known attenuation bias. (outcome, name=real_household_disposable_income_pc_growth) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:52:35+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 mega-spec D.1 #1, the flagship state-size test. It is deliberately the broadest fiscal hypothesis in the library and is expected to be cited as the anchor for every narrower fiscal-channel claim. The triangulation (cross-section + panel FE + four synthetic controls) is heavier than strictly necessary for a single hypothesis; that cost is accepted to make the finding robust enough to stand as an anchor. Data readiness: - WDI NE.CON.GOVT.ZS (ready) - WDI NY.GDP.PCAP.KD, NY.GDP.PCAP.PP.KD (ready) - WDI SP.POP.*, NE.TRD.GNFS.ZS, EG.IMP.CONS.ZS (ready) - IMF GGXWDG_NGDP (ready) - WGI GE.EST (ready) - OECD SDD HH disposable income (pending — falls back to WDI GDP-pc-KD at v1 with an explicit attenuation-bias flag; re-runs automatically on OECD SDD fetcher landing)

Authored framework. Read the transparency note.