Public employment decline in developing countries in the 21st century: The role of globalization

Does globalization increases or decreases the size of government (“compensation” versus “efficiency” hypothesis)? The debate is re-visited with innovative bureaucracy and globalization indicators using panel data for the unexplored period 2000–2016. Robust evidence suggests that global competition reduces public employment. [Display omitted] •Robust evidence suggests that global competition reduces the size of government.•The paper is the first to study new 2000-2016 data.•Innovative bureaucracy and globalization indicators are used.