In the third column (Outlier 3), we collect the results from estimating our preferred models without the United States.We conjecture that the USA might be an outlier due to the large deficits incurred during the arms race with the Soviet Union during the late 1980s, and the relatively decentralized public sector. However, we find that the results remain essentially the same.
In the fourth (Outlier 4) and fifth (Outlier 5) column, we present the results when Belgium and Spain, respectively, are excluded. These two countries might influence the results unduly because of the rapid process of decentralization that was initiated in both during the late 1980s. However, we find that the results do not differ from the baseline model.
In view of these results, we conclude that our findings in the baseline models are robust to outliers.
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