Government Size and Growth: A Rejoinder

Journal of Economic Surveys, Forthcoming

IFN Working Paper No. 858a

6 Pages Posted: 7 Jan 2015

See all articles by Andreas Bergh

Andreas Bergh

Research Institute of Industrial Economics (IFN); Lund University - Department of Economics

Magnus Henrekson

Research Institute of Industrial Economics (IFN)

Multiple version iconThere are 2 versions of this paper

Date Written: January 6, 2015

Abstract

In our 2011 survey of the literature in the Journal of Economic Surveys on the effect of government size on economic growth in wealthy countries we find a relatively consistent pattern: an increase in government size by 10 percentage points is associated with a 0.5 to 1 percentage point lower annual growth rate. This conclusion is questioned by Colombier (2014). In this rejoinder we present a rebuttal of Colombier’s argument based on a detailed scrutiny of his own statistical evidence and regression results. Furthermore, we note that several new papers that have appeared since our original article was published give support to our main conclusion.

Keywords: Government size, Government expenditure, Economic growth, Economic freedom, Globalization, Taxation, Cross-country regressions

JEL Classification: E62, H11, H20, O23, O43

Suggested Citation

Bergh, Andreas and Henrekson, Magnus, Government Size and Growth: A Rejoinder (January 6, 2015). Journal of Economic Surveys, Forthcoming; IFN Working Paper No. 858a. Available at SSRN: https://ssrn.com/abstract=2545809

Andreas Bergh

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34 2nd floor
Stockholm, SE-102 15
Sweden
0707790734 (Phone)

HOME PAGE: http://www.ifn.se/web/AndreasB

Lund University - Department of Economics ( email )

P.O. Box 7082
S-220 07
Lund
Sweden

HOME PAGE: http://www.nek.lu.se/

Magnus Henrekson (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

P.O. Box 55665
Grevgatan 34
Stockholm, SE-10215
Sweden
+46-8-6654502 (Phone)
+46-8-6654599 (Fax)

HOME PAGE: http://www.ifn.se/mh

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