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Efficient government size: France in the 20 th century

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  • François Facchini

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP11 - Université Paris-Sud - Paris 11)

  • Mickaël Melki

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

The benefits and costs of government suggest an efficient government size. We investigate efficient government size by analyzing the relation between public spending and real GDP for France in the period 1896–2008. The results show a co-integration nonlinear relationship. Our time-series data on France represents one of the longest periods studied in literature. Our empirical findings suggest that efficient government size measured by public spending was reached when public spending was around 30% of GDP. Conclusions point to particularities of countries that suggest efficient government size is specific to different countries.

Suggested Citation

  • François Facchini & Mickaël Melki, 2013. "Efficient government size: France in the 20 th century," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01286723, HAL.
  • Handle: RePEc:hal:cesptp:hal-01286723
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01286723
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    Keywords

    Economic growth; Nonlinear cointegration; Public spending; Optimal government size;

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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