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

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  • Arthur Grimes

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    (Motu Economic and Public Policy Research)

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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Bibliographic 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
Date of revision:
Handle: RePEc:mtu:wpaper:03_10

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Cited by:
  1. Michelle Poland & David C Maré, 2005. "Defining Geographic Communities," Urban/Regional 0509016, EconWPA.
  2. Arthur Grimes, 2005. "Intra & Inter-Regional Industry Shocks: A New Metric with an Application to Australasian Currency Union," Macroeconomics 0509019, EconWPA.
  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. Shanaka Herath, 2009. "The Size of the Government and Economic Growth: An Empirical Study of Sri Lanka," SRE-Disc sre-disc-2009_08, Institute for the Environment and Regional Development, Department of Socioeconomics, Vienna University of Economics and Business.
  5. Grimes, Arthur, 2005. "Regional and industry cycles in Australasia: Implications for a common currency," Journal of Asian Economics, Elsevier, vol. 16(3), pages 380-397, June.
  6. David C. Maré, 2005. "Indirect Effects of Active Labour Market Policies," Working Papers 05_01, Motu Economic and Public Policy Research.
  7. anwar, saba & munir, kashif, 2013. "Size of the Government, Quality of Institutions and Growth in SAARC Countries," MPRA Paper 49524, University Library of Munich, Germany.

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