[PDF] Can We Determine The Optimal Size Of Government eBook

Author : James A. Kahn
Publisher :
Page : 0 pages
File Size : 49,18 MB
Release : 2013
Category :
ISBN :

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The massive spending programs and new regulations adopted by many countries around the world in response to the economic crisis of 2008 have drawn renewed attention to the role of government in the economy. Studies of the relationship between government size and economic growth have come up with a wide range of estimates of the "optimal" or growth-maximizing size of government, ranging anywhere between 15 and 30 percent of gross domestic product (GDP). This paper argues that such an exercise is ill conceived. Modern growth economics suggests, first, that government policies leave their long-term impact primarily on the level of economic activity, not the growth rate; and, second, that the sources of this impact are multi-dimensional and not necessarily well measured by conventional measures of "size," such as the share of government spending in GDP. In fact, measures of economic freedom more closely relate to per capita GDP than do simple measures of government spending. The evidence shows that governments are generally larger than optimal, but because the available data include primarily countries whose governments are too large, it cannot plausibly say what the ideal size of government is. The data can realistically only say that smaller governments are better, and suggest that the optimal size of government is smaller than what we observe today.

Author : Jon Bakija
Publisher : Univ of California Press
Page : 219 pages
File Size : 15,17 MB
Release : 2016-06-21
Category : Political Science
ISBN : 0520962818

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The size of government is arguably the most controversial discussion in United States politics, and this issue won't fade from prominence any time soon. There must surely be a tipping point beyond which more government taxing and spending harms the economy, but where is that point? In this accessible book, best-selling authors Jeff Madrick, Jon Bakija, Lane Kenworthy, and Peter Lindert try to answer whether our government can grow any larger and examine how we can optimize growth and fair distribution.

Author : Václav Rybáček
Publisher :
Page : 0 pages
File Size : 33,54 MB
Release : 2020
Category : Austria
ISBN : 9781788210102

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Vaclav Rybacek argues that many studies have underestimated the size of government, leading to erroneous policy recommendations and an unrealistic assessment of a government's ability to meet its debts. Drawing on Austrian economic theory, the book offers a more robust methodology for the measurement of government.

Author : Mr.Jack Diamond
Publisher : International Monetary Fund
Page : 84 pages
File Size : 21,38 MB
Release : 1999-07-01
Category : Business & Economics
ISBN : 9781557757876

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Traditionally, economics training in public finances has focused more on tax than public expenditure issues, and within expenditure, more on policy considerations than the more mundane matters of public expenditure management. For many years, the IMF's Public Expenditure Management Division has answered specific questions raised by fiscal economists on such missions. Based on this experience, these guidelines arose from the need to provide a general overview of the principles and practices observed in three key aspects of public expenditure management: budget preparation, budget execution, and cash planning. For each aspect of public expenditure management, the guidelines identify separately the differing practices in four groups of countries - the francophone systems, the Commonwealth systems, Latin America, and those in the transition economies. Edited by Barry H. Potter and Jack Diamond, this publication is intended for a general fiscal, or a general budget, advisor interested in the macroeconomic dimension of public expenditure management.

Author : Ludger Schuknecht
Publisher : Cambridge University Press
Page : 305 pages
File Size : 42,17 MB
Release : 2020-11-12
Category : Business & Economics
ISBN : 1108496237

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Up-to-date, holistic and comprehensive discussion of public expenditure, its history, value for money, risks and remedies.

Author : Muntasir Murshed
Publisher :
Page : 13 pages
File Size : 18,39 MB
Release : 2018
Category :
ISBN :

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The indispensable role of government expenditure in dictating the economic growth performances in any economy cannot be overlooked. The need of greater resource mobilization through enhancement of government expenditure has also been acknowledged in the United Nations 2030 Sustainable Development agenda. It has been specifically addressed as a key macroeconomic tool to ensure a couple of the crucial Sustainable Development Goals (SDGs). However, the relationship between the optimal size of government expenditure and economic growth has displayed ambiguity in the empirical literature which questions the effectiveness of rapidly increasing the volume of government expenditure across the globe, without putting much emphasis on the country or region-specific disparities. This paper aims to bridge this gap in the empirical literature investigating the non-linear nexus between government size and economic growth in light of the Armey curve. This paper employed annual data stemming from 1980 to 2016 for a panel of 9 selected countries from South and Southeast Asia. For robustness check, the authors also considered subpanel investigations with respect to region-specific and lower-middle-income economies. In the core regression model, the economic growth rate was expressed as a function of government expenditure and other control variables. The fixed effects panel estimation methodology was the chosen estimation tool. The results provide statistical evidence in favor of the validity of the Armey Curve in context of the full panel and the Southeast Asian subpanel data. This paper also sheds light on the threshold optimal levels of government expenditure. In light of the estimated statistical evidence, the optimal government sizes in the context of the full panel and the Southeast Asian subpanel are estimated to be 148,627.5 and 57,765.7 million US dollars.

Author : Alberto Alesina
Publisher : MIT Press
Page : 286 pages
File Size : 40,88 MB
Release : 2005-01-14
Category : Business & Economics
ISBN : 9780262261401

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The authors of this timely and provocative book use the tools of economic analysis to examine the formation and change of political borders. They argue that while these issues have always been at the core of historical analysis, international economists have tended to regard the size of a country as "exogenous," or no more subject to explanation than the location of a mountain range or the course of a river. Alesina and Spolaore consider a country's borders to be subject to the same analysis as any other man-made institution. In The Size of Nations, they argue that the optimal size of a country is determined by a cost-benefit trade-off between the benefits of size and the costs of heterogeneity. In a large country, per capita costs may be low, but the heterogeneous preferences of a large population make it hard to deliver services and formulate policy. Smaller countries may find it easier to respond to citizen preferences in a democratic way. Alesina and Spolaore substantiate their analysis with simple analytical models that show how the patterns of globalization, international conflict, and democratization of the last two hundred years can explain patterns of state formation. Their aim is not only "normative" but also "positive"—that is, not only to compute the optimal size of a state in theory but also to explain the phenomenon of country size in reality. They argue that the complexity of real world conditions does not preclude a systematic analysis, and that such an analysis, synthesizing economics, political science, and history, can help us understand real world events.