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Public spending structure, minimal state and economic growth in France (1870–2010)

Author

Listed:
  • François Facchini

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Elena Seghezza

    (UniGe - Università degli studi di Genova = University of Genoa = Université de Gênes)

Abstract

There is now a vast literature on the effects of the various functional components of public spending on growth. This contribution focuses on the effects of the composition of public spending on growth with reference to France for the period 1870–2010. Using a new database we show that the only functional component of expenditure that clearly contributes to the growth of French output is the expenditure which is aimed at the protection of property rights. Public interventions in support of the economy, on the other hand, have no impact on growth. In the area of social spending, only health expenditure contributes to output growth. In the case of France the empirical evidence therefore seems to confirm not only the crucial importance of the protection of property rights highlighted by neo-institutional theory, but also Smith's minimal state hypothesis: the restriction of the size of the state and the delimitation to its essential functions tends to favour output growth.

Suggested Citation

  • François Facchini & Elena Seghezza, 2018. "Public spending structure, minimal state and economic growth in France (1870–2010)," Post-Print hal-01724097, HAL.
    • Handle: RePEc:hal:journl:hal-01724097
    DOI: 10.1016/j.econmod.2018.01.014
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    Cited by:

    1. Wahyudi Wahyudi, 2020. "The Relationship between Government Spending and Economic Growth Revisited," International Journal of Economics and Financial Issues, Econjournals, vol. 10(6), pages 84-88.
    2. Pedro R. D. Bom & Aitor Goti, 2018. "Public Capital and the Labor Income Share," Sustainability, MDPI, vol. 10(11), pages 1-17, October.
    3. Nguyen, Thi Nguyet, 2025. "Optimizing public expenditure for knowledge-based growth: Evidence from provincial data in Vietnam," Journal of Asian Economics, Elsevier, vol. 100(C).
    4. Gilbert Nartea & Jacqueline Hernandez, 2020. "Government Size, the Composition of Public Spending and Economic Growth in Netherland," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 9(2), pages 82-89.
    5. Canh Phuc NGUYEN & Christophe SCHINCKUS, 2020. "The Spending Behavior of Government through the Lenses of Global Uncertainty and Economic Integration," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 35-57, July.
    6. Bao Bing, 2023. "The impact of higher education on high quality economic development in China: A digital perspective," PLOS ONE, Public Library of Science, vol. 18(8), pages 1-17, August.
    7. Zhang, Dongyang & Mohsin, Muhammad & Taghizadeh-Hesary, Farhad, 2022. "Does green finance counteract the climate change mitigation: Asymmetric effect of renewable energy investment and R&D," Energy Economics, Elsevier, vol. 113(C).
    8. Zhang, Dongyang & Mohsin, Muhammad & Rasheed, Abdul Khaliq & Chang, Youngho & Taghizadeh-Hesary, Farhad, 2021. "Public spending and green economic growth in BRI region: Mediating role of green finance," Energy Policy, Elsevier, vol. 153(C).
    9. Adedamola, Qazeem & Mustapha, Ishaq & Masih, Mansur, 2018. "Fresh evidence on growth, expenditure and energy debate: GMM, Quantile and Threshold approaches," MPRA Paper 112885, University Library of Munich, Germany.
    10. Stella Karagianni & Maria Pempetzoglou & Anastasios Saraidaris, 2024. "New Evidence of Causal Relationships Between Government Spending and Economic Growth in the United Kingdom," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 52(4), pages 187-200, December.

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