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An Assessment of the Growth-Enhancing Size of Government in the Caribbean

Author

Listed:
  • Alleyne, K.A.
  • Lewis-Bynoe, D.
  • Moore, W.

Abstract

Between 1990 and 1994, the average size of the public sector in the Caribbean was just 16 percent of GDP, in the five years hence, the ratio has climbed and currently stands at 22 percent of GDP. While an expansion in the size of government usually results in the greater provision of services, it can also lead to slower rates of growth because of greater bureaucracy and the crowding-out of private sector driven initiatives. Using a simple production function approach, this study provides an assessment of the growth-enhancing size of government in the Caribbean using annual observations for the period 1975 to 2002. The econometric results in the paper suggest that government services do positively influence growth, but only if the size of government is, on average, between 10 percent and 16 percent of total real value-added.

Suggested Citation

  • Alleyne, K.A. & Lewis-Bynoe, D. & Moore, W., 2004. "An Assessment of the Growth-Enhancing Size of Government in the Caribbean," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 4(3).
    • Handle: RePEc:eaa:aeinde:v:4:y:2004:i:1_21
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    File URL: http://www.usc.es/economet/reviews/aeid435.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Trofimov, Ivan D., 2020. "The optimum size of public education spending: panel data evidence," MPRA Paper 106847, University Library of Munich, Germany.
    3. Pelin Varol Iyidogan & Taner Turan, 2017. "Government Size and Economic Growth in Turkey: A Threshold Regression Analysis," Prague Economic Papers, Prague University of Economics and Business, vol. 2017(2), pages 142-154.
    4. Minh Quang Dao, 2012. "Government expenditure and growth in developing countries," Progress in Development Studies, , vol. 12(1), pages 77-82, January.

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    More about this item

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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