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Sizing the Government

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  • De Witte, Kristof
  • Moesen, Wim

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

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

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  2. Afonso, António & Schuknecht, Ludger & Tanzi, Vito, 2003. "Public sector efficiency: an international comparison," Working Paper Series, European Central Bank 0242, European Central Bank.
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  5. António Afonso & Ludger Schuknecht & Vito Tanzi, 2006. "Public Sector Efficiency: Evidence for New EU Member States and Emerging Markets," Working Papers Department of Economics, ISEG - School of Economics and Management, Department of Economics, University of Lisbon 2006/01, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  6. Borcherding, Thomas E & Deacon, Robert T, 1972. "The Demand for the Services of Non-Federal Governments," American Economic Review, American Economic Association, American Economic Association, vol. 62(5), pages 891-901, December.
  7. CREMER, Helmuth & DELLIS, Arnaud & PESTIEAU, Pierre, 2001. "Family size and optimal income taxation," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2001021, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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Citations

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Cited by:
  1. Facchini, François & Melki, Mickaël, 2013. "Efficient government size: France in the 20th century," European Journal of Political Economy, Elsevier, Elsevier, vol. 31(C), pages 1-14.
  2. Wu, Alfred M. & Lin, Mi, 2010. "Determinants of government size: Evidence from China," MPRA Paper, University Library of Munich, Germany 27089, University Library of Munich, Germany.
  3. 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), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 592-618.
  4. J. Stephen Ferris, 2010. "Fiscal Policy from a Public Choice Perspective," Carleton Economic Papers, Carleton University, Department of Economics 10-10, Carleton University, Department of Economics.
  5. Shanaka Herath, 2012. "Size Of Government And Economic Growth: A Nonlinear Analysis," Economic Annals, Faculty of Economics, University of Belgrade, Faculty of Economics, University of Belgrade, vol. 57(194), pages 7-30, July - Se.

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