THE SIZE OF GOVERNMENT AND ECONOMIC GROWTH IN EU COUNTRIES

Andrea Tkacova (), Beata Gavurova () and Maria Maslisova ()
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Andrea Tkacova: PhD., Technical University of Kosice, Faculty of Economics, B. Nemcovej 32, Košice, Slovakia,
Beata Gavurova: Professor PhD., Faculty of Management and Economics, Tomas Bata University in Zlin, Mostni 5139, 760 01 Zlin, Czech Republic
Maria Maslisova: Ing., Technical University of Kosice, Faculty of Economics, B. Nemcovej 32, Kosice, Slovakia

REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, 2023, vol. 2023, issue 40, 7-22

Abstract: The relationship between the public sector size and economic growth is the subject of many discussions. Momentarily, the four elementary streams are defined, while the resulting impact depends on the monitored sample of the countries and the employed methodology. The aim of the paper was to identify the impact of the public sector size on the economic growth of the 27 EU countries in the period 1996 to 2021. The public sector size was quantified using four different variables as total public expenditure, total public revenue, tax revenue and final government consumption. Through panel regression, the negative impact of the public sector size on the economic growth of the EU countries was demonstrated in all four models, while the most significant negative impact was reached by the final government consumption. The significant negative impact of the crisis presence on the economic growth of the EU countries was also demonstrated. The EU countries should focus their activities there to diminish the public sector growth and to manage the structure of the government expenditures from the current to capital expenditures of an investment characteristic.

Keywords: size of government; economic growth; public expenditure; panel regression (search for similar items in EconPapers)
JEL-codes: H20 H50 O40 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:rom:rampas:v:2023:y:2023:i:40:p:7-22

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