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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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References

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  7. Johannah Branson & C. Lovell, 2001. "A Growth Maximising Tax Structure for New Zealand," International Tax and Public Finance, Springer, vol. 8(2), pages 129-146, March.
  8. Katsimi, Margarita, 1998. " Explaining the Size of the Public Sector," Public Choice, Springer, vol. 96(1-2), pages 117-44, July.
  9. Scully, Gerald W, 2001. " Government Expenditure and Quality of Life," Public Choice, Springer, vol. 108(1-2), pages 123-45, July.
  10. António Afonso & Ludger Schuknecht & Vito Tanzi, 2006. "Public Sector Efficiency: Evidence for New EU Member States and Emerging Markets," Working Papers Department of Economics 2006/01, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
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  14. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October.
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  16. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
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Citations

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Cited by:
  1. J. Stephen Ferris, 2010. "Fiscal Policy from a Public Choice Perspective," Carleton Economic Papers 10-10, Carleton University, Department of Economics.
  2. Alfred Wu & Mi Lin, 2012. "Determinants of government size: evidence from China," Public Choice, Springer, vol. 151(1), pages 255-270, April.
  3. Facchini, François & Melki, Mickaël, 2013. "Efficient government size: France in the 20th century," European Journal of Political Economy, Elsevier, vol. 31(C), pages 1-14.
  4. 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.
  5. 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.

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