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Does government size affect per-capita income growth? A Hierarchical meta-regression analysis

Author

Listed:
  • Churchill, Sefa Awaworyi
  • Ugur, Mehmet
  • Yew, Siew Ling

Abstract

Since the late 1970s, the received wisdom has been that government size (measured as the ratio of total government expenditure to GDP or government consumption to GDP) is detrimental to economic growth. We conduct a hierarchical meta-regression analysis of 799 effect-size estimates reported in 87 primary studies to verify if such assertion is supported by existing evidence. Our findings indicate that the conventional prior belief is supported by evidence mainly from developed countries but not from less developed countries (LDCs). We argue that the negative relationship between government size and economic growth in developed countries may reflect endogeneity bias.

Suggested Citation

  • Churchill, Sefa Awaworyi & Ugur, Mehmet & Yew, Siew Ling, 2016. "Does government size affect per-capita income growth? A Hierarchical meta-regression analysis," Greenwich Papers in Political Economy 16016, University of Greenwich, Greenwich Political Economy Research Centre.
    • Handle: RePEc:gpe:wpaper:16016
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    Cited by:

    1. Alimi, R. Santos, 2020. "Public Spending and Economic Welfare in ECOWAS Countries: Does Level of Development Matter?," MPRA Paper 99425, University Library of Munich, Germany.
    2. Javier Andrés & Eduardo Bandrés & Rafael Doménech & María Dolores Gadea, 2024. "Global | Bienestar social y tamaño del Gobierno [Global | Social welfare and government size]," Working Papers 24/02, BBVA Bank, Economic Research Department.
    3. Sefa Awaworyi Churchill & Siew Ling Yew, 2018. "The effect of military expenditure on growth: an empirical synthesis," Empirical Economics, Springer, vol. 55(3), pages 1357-1387, November.
    4. Ricardo Alonzo Fern'andez Salguero, 2025. "The Crisis Simulator for Bolivia (KISr-p): An Empirically Grounded Modeling Framework," Papers 2510.16537, arXiv.org.
    5. Joseph Afamefuna Nduka & Amalachukwu Chijindu Ananwude & Charity Ifunanya Osakwe, 2019. "Expenditure of the Federal Government of Nigeria: Effect on the Standard of Living of her Citizens," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9(4), pages 57-64, October.
    6. 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.
    7. Colombier, Carsten, 2024. "How does government size affect economic growth? New results from a historical dataset," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 24-1, University of Cologne, FiFo Institute for Public Economics.
    8. Yuan, Yuan & Wang, Mingshu & Zhu, Yi & Huang, Xianjin & Xiong, Xuefeng, 2020. "Urbanization’s effects on the urban-rural income gap in China: A meta-regression analysis," Land Use Policy, Elsevier, vol. 99(C).
    9. Guilherme Correa Petry & Ely José Mattos, 2023. "The Effects of Public Expenditure on Municipal Development: A Dynamic Panel Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(2), pages 695-714, January.
    10. Ming-Yuan Hsieh, 2022. "The Sustainable Development and Strategic Approaches for Contemporary Higher Education," Sustainability, MDPI, vol. 14(19), pages 1-17, October.
    11. Zhang, Jingke & Li, Huan & Lin, Jingxia & Zheng, Wei & Li, Heng & Chen, Zhigang, 2020. "Meta-analysis of the relationship between high quality basic education resources and housing prices," Land Use Policy, Elsevier, vol. 99(C).
    12. Ricardo Alonzo Fern'andez Salguero, 2025. "A Keynesian Intertemporal Synthesis (KIS) Model: Towards a unified and empirically grounded framework for fiscal policy," Papers 2508.00224, arXiv.org.
    13. Abdulaziz H. Algaeed, 2022. "Government Spending Volatility and Real Economic Growth: Evidence From a Major Oil Producing Country, Saudi Arabia, 1970 to 2018," SAGE Open, , vol. 12(2), pages 21582440221, April.
    14. Awaworyi Churchill, S. & Yew, S.L., 2017. "Are government transfers harmful to economic growth? A meta-analysis," Economic Modelling, Elsevier, vol. 64(C), pages 270-287.
    15. Emilian Dobrescu, 2018. "Functional trinity of public finance in an emerging economy," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 7(1), pages 1-27, December.

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    Keywords

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    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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