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Government size, public debt and real economic growth: a panel analysis

Author

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  • William R. DiPeitro
  • Emmanuel Anoruo

Abstract

Purpose - The purpose of this paper is to examine the impact of the size of government and public debt on real economic growth, for a panel of 175 countries around the world. Design/methodology/approach - The paper utilizes the fixed‐effects and random‐effects techniques to estimate the panel regressions. Findings - The results indicate that both the size of government and the extent of government indebtedness have negative effects on economic growth. Practical implications - The findings suggest that the authorities ought to take the necessary steps to curtail excessive government spending and public debts, in order to promote economic growth. Originality/value - The contribution of the paper is its application of the fixed‐ and random‐effects techniques in modeling the relation of real economic growth to the size of government and public debt, for a panel of 175 countries around the world.

Suggested Citation

  • William R. DiPeitro & Emmanuel Anoruo, 2012. "Government size, public debt and real economic growth: a panel analysis," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 39(4), pages 410-419, August.
    • Handle: RePEc:eme:jespps:v:39:y:2012:i:4:p:410-419
    DOI: 10.1108/01443581211255620
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    Citations

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    Cited by:

    1. Petr Zimčík, 2016. "Velikost veřejného sektoru a ekonomický růst [The Scope of Government and Economic Growth]," Politická ekonomie, Prague University of Economics and Business, vol. 2016(4), pages 439-450.
    2. Jelena Stankevičienė & Sergej Rosov, 2013. "Implementation of Multi-Objective Evaluation Method in Public Debt Risk Management," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 1(4), pages 7-19.
    3. Whajah, Jennifer & Bokpin, Godfred A. & Kuttu, Saint, 2019. "Government size, public debt and inclusive growth in Africa," Research in International Business and Finance, Elsevier, vol. 49(C), pages 225-240.
    4. Francesco Forte & Cosimo Magazzino, 2014. "Optimal size of governments and the optimal ratio between current and capital expenditure," Chapters, in: Francesco Forte & Ram Mudambi & Pietro Maria Navarra (ed.), A Handbook of Alternative Theories of Public Economics, chapter 15, pages 342-367, Edward Elgar Publishing.
    5. Hüseyin Şen & Ayşe Kaya & Ayşegül Durucan, 2023. "New insights into the growth-maximizing size of government: evidence and implications for Turkey," Economic Change and Restructuring, Springer, vol. 56(4), pages 2243-2296, August.
    6. Daxin Dong & Boyang Xu & Ning Shen & Qian He, 2021. "The Adverse Impact of Air Pollution on China’s Economic Growth," Sustainability, MDPI, vol. 13(16), pages 1-27, August.
    7. Liu, Jiaqi & Liu, Jicai & Bu, Zehui & Zhou, Yining & He, Peifen, 2022. "Path analysis of influencing government's excessive behavior in PPP project: Based on field dynamic theory," Transportation Research Part A: Policy and Practice, Elsevier, vol. 166(C), pages 522-540.

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