Public Vices, Private Serfdom? Comments on the Optimal Size of the Brazilian State

Abstract

In this paper Scully's model (1995) was implemented empirically to determine the optimal size of the public sector in Brazil in terms of "serfdom" days allocated by individuals for the payment of taxes (the so-called tax freedom day). The results indicate that this number would be approximately 118 days per year, which corresponds to a total tax burden of about 32% of GDP. As comparisons between countries are limited by the distinct taxation systems adopted, we seek to explain this result in light of the main hypotheses about government growth in literature.

Keywords: government size, rent-seeking, public choice, tax freedom day

JEL Classification: D72