Government Size and Growth: A Rejoinder
Journal of Economic Surveys, Forthcoming
6 Pages Posted: 7 Jan 2015
Date Written: January 6, 2015
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: Suggested Citation