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Economic Growth and the Size and Structure of Government: Implications for New Zealand

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Author Info
Arthur Grimes () (Motu Economic and Public Policy Research)

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Abstract

The work of Gwartney, Holcombe and Lawson (GHL, 1998) is cited in New Zealand debate to demonstrate that a larger government share of GDP is detrimental for economic growth. Their work is reassessed here. We find a number of omissions in their analysis lead to a considerable over-statement of the effect of government size on growth. More important for growth, according to other recent work, are the structures of government revenues and expenditures. The size and structure of New Zealand government flows are examined using recent IMF data. This analysis indicates that New Zealand has a relatively small government sector. However, the structures of both government revenues and expenditures warrant attention.

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File URL: http://motu-www.motu.org.nz/wpapers/03_10.pdf
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Publisher Info
Paper provided by Motu Economic and Public Policy Research in its series Working Papers with number 03_10.

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Length: 31 pages
Date of creation: Jul 2003
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Handle: RePEc:mtu:wpaper:03_10

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Web page: http://www.motu.org.nz
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Find related papers by JEL classification:
E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

Cited by:
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  1. Michelle Poland & David C Maré, 2005. "Defining Geographic Communities," Urban/Regional 0509016, EconWPA. [Downloadable!]
    Other versions:
  2. David C Maré, 2005. "Indirect Effects of Active Labour Market Policies," HEW 0509004, EconWPA. [Downloadable!]
    Other versions:
  3. Arthur Grimes, 2005. "Regional and Industry Cycles in Australasia: Implications for a Common Currency," Macroeconomics 0509020, EconWPA. [Downloadable!]
    Other versions:
  4. Arthur Grimes, 2005. "Intra & Inter-Regional Industry Shocks: A New Metric with an Application to Australasian Currency Union," Macroeconomics 0509019, EconWPA. [Downloadable!]
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This page was last updated on 2009-11-26.


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