IDEAS home Printed from https://ideas.repec.org/a/dse/indecr/v39y2004i2p295-314.html
   My bibliography  Save this article

Government Size and Economic Growth:An Investigation of Causality in India

Author

Listed:
  • Ramesh Chandra

    (Department of Economics, University of Strathclyde Sir William Duncan Building, 130 Rottenrow Glasgow G4 OGE, UK)

Abstract

The development literature of the post-war period justified governmental intervention in economic development on a number of grounds such as market failure, trade pessimism and further impoverishment of poor countries through trade. In line with the prevalent mainstream thinking, the Indian government implemented an inward-looking model of growth, and tried to engineer an economic take-off through its direct and indirect involvement. The objective of this paper is to examine whether the government actually succeeded in acting as an engine of growth in India. Taking 1950-1996 as the period of study, this paper finds that a large government size (in terms of investment and total expenditures) has a negative influence on growth in the short term although there is no long-term relationship between government size and GDP.

Suggested Citation

  • Ramesh Chandra, 2004. "Government Size and Economic Growth:An Investigation of Causality in India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 39(2), pages 295-314, july.
    • Handle: RePEc:dse:indecr:v:39:y:2004:i:2:p:295-314
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Themba G. Chirwa & Nicholas M. Odhiambo, 2019. "The nexus between key macroeconomic determinants and economic growth in Zambia: a dynamic multivariate Granger causality linkage," Empirical Economics, Springer, vol. 57(1), pages 301-327, July.
    2. Akram, Vaseem & Rath, Badri Narayan, 2020. "Optimum government size and economic growth in case of Indian states: Evidence from panel threshold model," Economic Modelling, Elsevier, vol. 88(C), pages 151-162.
    3. LONZO LUBU, Gastonfils, 2014. "Taille Optimale De L’Etat En Rd Congo [Optimal Size Of Government In The Democratic Republic Of Congo]," MPRA Paper 60715, University Library of Munich, Germany.

    More about this item

    Keywords

    Government Size; Public Expenditure; Growth; Causality; India;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dse:indecr:v:39:y:2004:i:2:p:295-314. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Pami Dua (email available below). General contact details of provider: https://edirc.repec.org/data/deudein.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.