The Scope of Government and its Impact on Economic Growth in OECD Countries

Bernhard Heitger
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Bernhard Heitger: The Kiel Institute of World Economics, Postal: Duesternbrooker Weg 120, 24105 Kiel, Germany, http://www.ifw-kiel.de/

Economia Internazionale / International Economics, 2002, vol. 55, issue 3, 323-350

Abstract: This paper investigates the relationship between the size of government and economic growth in OECD countries in 1960–2000. The underlying idea is that government expenditures on public goods basically have a positive effect on growth, but this growth effect tends to decline or even reverse when government is overdoing, e.g. by increasing expenditures in such a way that it ultimately also provides private goods. Empirical analyses based on panel estimates for 21 OECD countries support this hypothesis: Total government expenditures as well as expenditures by type indicate a significant negative impact on economic growth (excepting public investments) in these countries.

JEL-codes: H10 H20 O40 (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ecoint:0181

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