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Sizing the Government

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Author Info
De Witte, Kristof
Moesen, Wim

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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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File URL: http://mpra.ub.uni-muenchen.de/14785/
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 14785.

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Date of creation: 22 Apr 2009
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Handle: RePEc:pra:mprapa:14785

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Related research
Keywords: Data Envelopment Analysis; Government size; Public sector performance; Armey-curve.;

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Find related papers by JEL classification:
H10 - Public Economics - - Structure and Scope of Government - - - General
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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  3. Scully, Gerald W, 2001. " Government Expenditure and Quality of Life," Public Choice, Springer, vol. 108(1-2), pages 123-45, July. [Downloadable!] (restricted)
  4. António Afonso & Ludger Schuknecht & Vito Tanzi, 2006. "Public Sector Efficiency: Evidence for New EU Member States and Emerging Markets," Working Papers 2006/01, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.. [Downloadable!]
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  5. 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. [Downloadable!] (restricted)
  6. António Afonso & Davide Furceri, 2008. "Government size, composition, volatility and economic growth," Working Paper Series 849, European Central Bank. [Downloadable!]
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  7. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November. [Downloadable!] (restricted)
  8. Shamit Chakravarti & Sanjeev Gupta & Luc Leruth & Luiz de Mello, . "Transition Economies: How Appropriate is the Size and Scope of Government?," IMF Working Papers 01/55, International Monetary Fund. [Downloadable!]
  9. 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. [Downloadable!] (restricted)
  10. Katsimi, Margarita, 1998. " Explaining the Size of the Public Sector," Public Choice, Springer, vol. 96(1-2), pages 117-44, July. [Downloadable!] (restricted)
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  11. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S103-26, October. [Downloadable!] (restricted)
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  12. Helmuth Cremer & Arnaud Dellis & Pierre Pestieau, 2003. "Family size and optimal income taxation," Journal of Population Economics, Springer, vol. 16(1), pages 37-54, 02. [Downloadable!] (restricted)
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