Optimal government size and economic growth in France (1871-2008): An explanation by the State and market failures

François Facchini and Mickael Melki

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Abstract: This paper analyses the effect of public expenditure on economic growth from both a theoretical and an empirical point of view. Given that the economic literature supplies numerous and conflicting views on the topic, the article offers a framework combining both theories of market failures and State failures to account for an inverted U-shapped relation between government size and GDP growth. The empirical contribution is to provide evidence through a long time-series analysis of the existence of such a relation on the period 1871-2008 for France, which offers one of the longest stable democratic periods to analyse.

Keywords: Public spending; public expenditure; government size; BARS curve; Armey curve; economic growth; market failure; State failure; France.; France; Dépenses publiques; taille optimale de l'Etat; courbe d'Armey; croissance économique; défaillances de l'Etat et du marché. (search for similar items in EconPapers)
Date: 2011-12
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00654363
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Citations: View citations in EconPapers (10)

Published in 2011

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Working Paper: Optimal Government Size and Economic Growth in France (1871-2008): An explanation by the State and Market Failures (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00654363

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