Government size, composition, volatility and economic growth

This paper analyses the effects in terms of size and volatility of government revenue and spending on growth in OECD and EU countries. The results of the paper suggest that both variables are detrimental to growth. In particular, looking more closely at the effect of each component of government rev...

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Bibliographic Details
Published inEuropean Journal of Political Economy Vol. 26; no. 4; pp. 517 - 532
Main Authors Afonso, António, Furceri, Davide
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.12.2010
Elsevier
SeriesEuropean Journal of Political Economy
Subjects
Consumption
Economic Development
Economic growth
European Union
Expenditures
Fiscal policy
Fiscal policy Government size Fiscal volatility Economic growth
Fiscal volatility
Government Size
Government structure
Indirect taxation
Investment
OECD
Organizational size
Public expenditure
Public revenue
Revenue
Social security
Taxation
Volatility
E62
Fiscal policy
H50
Economic growth
Government size
O40
Fiscal volatility
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Summary:This paper analyses the effects in terms of size and volatility of government revenue and spending on growth in OECD and EU countries. The results of the paper suggest that both variables are detrimental to growth. In particular, looking more closely at the effect of each component of government revenue and spending, the results point out that i) indirect taxes (size and volatility); ii) social contributions (size and volatility); iii) government consumption (size and volatility); iv) subsidies (size); and v) government investment (volatility) have a sizeable, negative and statistically significant effect on growth.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
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ISSN:0176-2680
1873-5703
DOI:10.1016/j.ejpoleco.2010.02.002