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The Size of Government and Economic Growth

Author

Listed:
  • A. ILLARIONOV
  • N. PIVOVAROVA.

Abstract

Real GDP growth rate is a non-linear function of the size of government. On average, in countries with population of less than 1 mln people an increase in the size of government is associated with an increase in real growth rates, while in countries with population more than 1 mln people it leads to a decline in real growth rates. For Russia, as a rule, the critical level of government expenditures that effectively blocks sustainable economic growth is 36-38% of GDP, and the optimal level of government expenditures that maximizes economic growth is 18 to 21% of GDP.

Suggested Citation

  • A. Illarionov & N. Pivovarova., 2002. "The Size of Government and Economic Growth," Voprosy Ekonomiki, NP Voprosy Ekonomiki, vol. 9.
    • Handle: RePEc:nos:voprec:2002-9-2
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    Cited by:

    1. Facchini, François & Melki, Mickaël, 2013. "Efficient government size: France in the 20th century," European Journal of Political Economy, Elsevier, vol. 31(C), pages 1-14.
    2. François Facchini & Mickaël Melki, 2011. "Optimal Government Size and Economic Growth in France (1871-2008): An explanation by the State and Market Failures," Documents de travail du Centre d'Economie de la Sorbonne 11077, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    3. Mroczek Teresa & Skica Tomasz & Rodzinka Jacek, 2019. "Optimal Size of the General Government Sector from the Point of View of its Impact on the EU Economies," South East European Journal of Economics and Business, Sciendo, vol. 14(2), pages 95-105, December.
    4. Alimi, R. Santos, 2018. "Growth effect of government expenditures in West African countries: A nonlinear framework," MPRA Paper 99108, University Library of Munich, Germany, revised Mar 2019.
    5. Voznyak Galyna V., 2013. "Budget Policy and its Influence upon the Economic Development of a Region: Theoretical Aspects," Business Inform, RESEARCH CENTRE FOR INDUSTRIAL DEVELOPMENT PROBLEMS of NAS (KHARKIV, UKRAINE), Kharkiv National University of Economics, issue 9, pages 25-32.
    6. Facchini, François & Melki, Mickaël, 2013. "Efficient government size: France in the 20th century," European Journal of Political Economy, Elsevier, vol. 31(C), pages 1-14.

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