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Optimal Size Of Government Spending. The Case Of European Union Member States

Author

Listed:
  • Mihai Mutascu

    (West University of Timisoara)

  • Marius Milos

    (Eftimie Murgu University Resita)

Abstract

The theme of public expenditure has been of great interest in the latest years.Focusing on government size, role of government and the efficiency of the public sector becomes aneven more important issue nowadays when the financial crisis has covered severly almost alleconomies worlwide. The debate has as starting point the keynesian belief (state interventionovercomes recession periods) but also the division of the economy between the public and theprivate sector. Goods and services could be provided by the state, but many times the private sectorseems to be more efficient. Using a specific econometrical analysis, the authors try to establish theoptimal size of the public sector in both old and new member states of the European Union, a levelthat fosters economic growth and suggest that, following this point, GDP should be left in thehands of the private sector.

Suggested Citation

  • Mihai Mutascu & Marius Milos, 2009. "Optimal Size Of Government Spending. The Case Of European Union Member States," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(11), pages 1-45.
  • Handle: RePEc:alu:journl:v:1:y:2009:i:11:p:45
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    File URL: http://oeconomica.uab.ro/upload/lucrari/1120091/45.pdf
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    References listed on IDEAS

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    3. Philip Grossman, 1987. "The optimal size of government," Public Choice, Springer, vol. 53(2), pages 131-147, January.
    4. Ulrike Mandl & Adriaan Dierx & Fabienne Ilzkovitz, 2008. "The effectiveness and efficiency of public spending," European Economy - Economic Papers 2008 - 2015 301, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    5. Afonso, Antonio & St. Aubyn, Miguel, 2006. "Cross-country efficiency of secondary education provision: A semi-parametric analysis with non-discretionary inputs," Economic Modelling, Elsevier, vol. 23(3), pages 476-491, May.
    6. Afonso, António & Furceri, Davide, 2010. "Government size, composition, volatility and economic growth," European Journal of Political Economy, Elsevier, vol. 26(4), pages 517-532, December.
    7. António Afonso & Miguel St. Aubyn, 2006. "Relative Efficiency of Health Provision: a DEA Approach with Non-discretionary Inputs," Working Papers Department of Economics 2006/33, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    8. António Afonso & Ludger Schuknecht & Vito Tanzi, 2005. "Public sector efficiency: An international comparison," Public Choice, Springer, vol. 123(3), pages 321-347, June.
    9. Amartya SEN, 2000. "Work and rights," International Labour Review, International Labour Organization, vol. 139(2), pages 119-128, June.
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    Citations

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    Cited by:

    1. Camilo Alvis & Cristian Castrillón, 2013. "Tamaño óptimo del gasto público colombiano: una aproximación desde la teoría del crecimiento endógeno," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID, December.
    2. Uchechi Shirley Anaduaka & Vivian Ikwuoma Nnetu & Stephen Ekene Aguegboh & David Iheke Okorie, 2016. "Relative Maxima of the Public Sector: A Comparative Study of Nigeria and Ghana," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(11), pages 575-589, November.
    3. Szarowska Irena, 2013. "Relationship between government expenditure and output in the problematic regions in the European Union," Экономика региона, CyberLeninka;Федеральное государственное бюджетное учреждение науки «Институт экономики Уральского отделения Российской академии наук», issue 4 (36), pages 190-199.
    4. Alimi, R. Santos, 2014. "Does Optimal Government Size Exist for Developing Economies? The Case of Nigeria," MPRA Paper 56073, University Library of Munich, Germany.

    More about this item

    Keywords

    Key-words: public expenditure; economic growth; optimum level; public sector;

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General

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