The Size and Performance of Public Sector Activities in Europe: An Overview

Acta Oeconomica, Vol. 56, No. 4,, pp. 399-422, 2011

Posted: 20 Jun 2011 Last revised: 28 May 2017

See all articles by Heinz Handler

Heinz Handler

Austrian Institute of Economic Research (WIFO); Vienna University of Technology - Institute of Statistics and Mathematical Methods in Economics, Research Group Economics (ECON); Austrian Federal Chancellery - Verwaltungsakademie des Bundes

Bertrand Koebel

affiliation not provided to SSRN

Philipp Reiss

Maastricht University - Department of Economics

Margit Schratzenstaller

Justus Liebig Universität Giessen

Date Written: June 9, 2011

Abstract

Obvious differences between countries regarding their economic performance have led to the question whether the size, structure, and organisation of the public sector contribute to cross-country income levels and growth gaps. Public sector activities may have an effect on overall productivity and economic growth via two channels: Directly, through the level and changes of productivity within the public sector, and indirectly, by triggering off productivity changes in private production. This paper is concerned with the former aspect. It provides an overview of recent empirical literature on public sector performance and relates performance to the size and structure of the public sectors in Europe, the US and Japan. The results are not fully conclusive, but seem to attribute more efficiency to smaller rather than to larger government sectors. Public sector reforms aiming to consolidate the size of government are likely to enhance the sector’s own productivity and are thereby prone to contribute positively to overall economic performance.

Keywords: government size and structure, public sector performance

JEL Classification: H00, H10, O49

Suggested Citation

Handler, Heinz J. and Koebel, Bertrand and Reiss, Philipp and Schratzenstaller, Margit, The Size and Performance of Public Sector Activities in Europe: An Overview (June 9, 2011). Acta Oeconomica, Vol. 56, No. 4,, pp. 399-422, 2011, Available at SSRN: https://ssrn.com/abstract=1861532

Heinz J. Handler (Contact Author)

Austrian Institute of Economic Research (WIFO) ( email )

P.O. Box 91
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Vienna, A-1103
Austria
+43 1 79826010 (Phone)

HOME PAGE: http://www.wifo.ac.at

Vienna University of Technology - Institute of Statistics and Mathematical Methods in Economics, Research Group Economics (ECON) ( email )

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Vienna, 1040
Austria

HOME PAGE: http://www.econ.tuwien.ac.at

Austrian Federal Chancellery - Verwaltungsakademie des Bundes ( email )

Mauerbachstrasse 43-45
Vienna, A-1140
Austria

Bertrand Koebel

affiliation not provided to SSRN ( email )

Philipp Reiss

Maastricht University - Department of Economics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands

Margit Schratzenstaller

Justus Liebig Universität Giessen ( email )

Betriebswirtschaftslehre VII
Giessen, 35394
Germany

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