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Economic Growth and the Size and Structure of Government: Implications for New Zealand

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  • Arthur Grimes

    () (Motu Economic and Public Policy Research)

Abstract

The work of Gwartney, Holcombe and Lawson (GHL, 1998) is cited in New Zealand debate to demonstrate that a larger government share of GDP is detrimental for economic growth. Their work is reassessed here. We find a number of omissions in their analysis lead to a considerable over-statement of the effect of government size on growth. More important for growth, according to other recent work, are the structures of government revenues and expenditures. The size and structure of New Zealand government flows are examined using recent IMF data. This analysis indicates that New Zealand has a relatively small government sector. However, the structures of both government revenues and expenditures warrant attention.

Suggested Citation

  • Arthur Grimes, 2003. "Economic Growth and the Size and Structure of Government: Implications for New Zealand," Working Papers 03_10, Motu Economic and Public Policy Research.
  • Handle: RePEc:mtu:wpaper:03_10
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    References listed on IDEAS

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    Cited by:

    1. Sefa Awaworyi Churchill & Mehmet Ugur & Siew Ling Yew, 2017. "Does Government Size Affect Per-Capita Income Growth? A Hierarchical Meta-Regression Analysis," The Economic Record, The Economic Society of Australia, vol. 93(300), pages 142-171, March.
    2. Shanaka Herath, 2009. "The Size of the Government and Economic Growth: An Empirical Study of Sri Lanka," SRE-Disc sre-disc-2009_08, Institute for Multilevel Governance and Development, Department of Socioeconomics, Vienna University of Economics and Business.
    3. Grimes, Arthur, 2005. "Regional and industry cycles in Australasia: Implications for a common currency," Journal of Asian Economics, Elsevier, vol. 16(3), pages 380-397, June.
    4. Arthur Grimes, 2005. "Intra & Inter-Regional Industry Shocks: A New Metric with an Application to Australasian Currency Union," Macroeconomics 0509019, EconWPA.
    5. Michelle Poland & David C Maré, 2005. "Defining Geographic Communities," Urban/Regional 0509016, EconWPA.
    6. anwar, saba & munir, kashif, 2013. "Size of the Government, Quality of Institutions and Growth in SAARC Countries," MPRA Paper 49524, University Library of Munich, Germany.
    7. David C Maré, 2005. "Indirect Effects of Active Labour Market Policies," HEW 0509004, EconWPA.
    8. Shanaka Herath, 2012. "Size Of Government And Economic Growth: A Nonlinear Analysis," Economic Annals, Faculty of Economics, University of Belgrade, vol. 57(194), pages 7-30, July - Se.

    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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