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Efficient government size: France in the 20 th century

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  • François Facchini

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP11 - Université Paris-Sud - Paris 11)

  • Mickaël Melki

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

The benefits and costs of government suggest an efficient government size. We investigate efficient government size by analyzing the relation between public spending and real GDP for France in the period 1896–2008. The results show a co-integration nonlinear relationship. Our time-series data on France represents one of the longest periods studied in literature. Our empirical findings suggest that efficient government size measured by public spending was reached when public spending was around 30% of GDP. Conclusions point to particularities of countries that suggest efficient government size is specific to different countries.

Suggested Citation

  • François Facchini & Mickaël Melki, 2013. "Efficient government size: France in the 20 th century," Post-Print hal-01286723, HAL.
    • Handle: RePEc:hal:journl:hal-01286723
    DOI: 10.1016/j.ejpoleco.2013.03.002
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    Keywords

    Economic growth; Optimal government size; Nonlinear cointegration; Public spending; Croissance économique; Dépenses publiques; Courbe de BARS;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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