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

Arthur Grimes

No 03_10, Working Papers from 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.

JEL-codes: E62 H11 O23 O57 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2003-07
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Citations: View citations in EconPapers (12)

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Working Paper: Economic Growth and the Size and Structure of Government: Implications for New Zealand (2003)
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