Document Type : Original Article


1 Assistant professor & Member of Academic Staff, Department of Economic, Tabriz Branch, Islamic Azad University, Tabriz, Iran

2 Master of Economic Sciences, Tabriz branch, Islamic Azad University, Tabriz, Iran


This paper concentrates on the relationship between trade openness, financial openness and government size concerning the ECO. Compensation hypothesis explains that trade-openness is positively interconnected with the government size. Also, financial openness has negative relationship with the government size. Using panel data for ECO countries during 2000-2009, we have found evidence of a positive relationship between trade-openness and government size and also a negative relationship between financial openness and the size of government.


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