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Sizing the government

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  • Kristof Witte

    ()

  • Wim Moesen

Abstract

Is there such a thing as an optimal government size? We investigate by the non-parametric Data Envelopment Analysis (DEA) the so-called `Armey curve' which claims an inverted U-shaped relationship between government size and economic performance. The DEA scores are linked to control variables as initial per capita income, openness, population density, urbanization, country size and family size. For 23 OECD-countries we estimate the country specific efficiency scores, which reveal the extent to which a country uses excess public resources to achieve the observed growth rate of GDP.

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 145 (2010)
Issue (Month): 1 (October)
Pages: 39-55

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Handle: RePEc:kap:pubcho:v:145:y:2010:i:1:p:39-55

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Web page: http://www.springerlink.com/link.asp?id=100332

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Keywords: Data envelopment analysis; Government size; Public sector performance; Armey-curve; H10; H21; H31;

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Cited by:
  1. Muraközy, László, 2011. "Összefonódó költségvetési kihívások a 21. század Európájában
    [Interlocking budget challenges in 21st century Europe]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 592-618.
  2. François Facchini & Mickaël Melki, 2011. "Optimal Government Size and Economic Growth in France (1871-2008): An explanation by the State and Market Failures," Documents de travail du Centre d'Economie de la Sorbonne 11077, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  3. Shanaka Herath, 2012. "Size Of Government And Economic Growth: A Nonlinear Analysis," Economic Annals, Faculty of Economics, University of Belgrade, vol. 57(194), pages 7-30, July - Se.
  4. Wu, Alfred M. & Lin, Mi, 2010. "Determinants of government size: Evidence from China," MPRA Paper 27089, University Library of Munich, Germany.
  5. J. Stephen Ferris, 2010. "Fiscal Policy from a Public Choice Perspective," Carleton Economic Papers 10-10, Carleton University, Department of Economics.

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