IDEAS home Printed from https://ideas.repec.org/a/taf/rrpaxx/v16y2011i2p95-116.html
   My bibliography  Save this article

Government Size, Economic Growth and Unemployment: Evidence from Advanced and Developing Economy Countries (A Time Series Analysis, 1996–2006)

Author

Listed:
  • Sa Yongjin

Abstract

The primary objective of this study is to estimate empirically the impact of government size on economic growth in 32 advanced and 51 developing countries from 1996 to 2006. Specifically, how do the effects of government size on economic growth in two groups of countries differ? In contrast to previous studies, this one attempts to gauge the relative effect of government size on economic growth by using a united regression model combining advanced and developing countries, as well as the same control variables. As theoretically expected, this study demonstrates that the effect of government size on economic growth is positive for developed countries and negative for advanced countries. Furthermore, the model confirms that the relative effect of government size on economic growth in developing countries is almost five times higher than in advanced ones. Another purpose of this study is to estimate the impact of government size on the unemployment rate in two groups of countries. The evidence from the regression results shows that greater government size is associated with a higher unemployment rate in both groups of countries. The study demonstrates that a larger government has a detrimental effect on economic growth, due, at least in part, to a higher unemployment rate. In addition, the model confirms that the relative effect of government size on the unemployment rate in developing countries is almost three times higher than in advanced countries. Finally, based on the result that government size has significantly different effects on economic growth and the unemployment rate across two groups of countries, this study implies that policy makers need to consider different levels and types of fiscal policies to improve economic growth depending on the country’s economic level.

Suggested Citation

  • Sa Yongjin, 2011. "Government Size, Economic Growth and Unemployment: Evidence from Advanced and Developing Economy Countries (A Time Series Analysis, 1996–2006)," International Review of Public Administration, Taylor & Francis Journals, vol. 16(2), pages 95-116, August.
  • Handle: RePEc:taf:rrpaxx:v:16:y:2011:i:2:p:95-116
    DOI: 10.1080/12264431.2011.10805198
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/12264431.2011.10805198
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/12264431.2011.10805198?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Charles R. Hulten, 1996. "Infrastructure Capital and Economic Growth: How Well You Use It May Be More Important Than How Much You Have," NBER Working Papers 5847, National Bureau of Economic Research, Inc.
    2. Heitger, Bernhard, 2001. "The Scope of Government and its Impact on Economic Growth in OECD Countries," Kiel Working Papers 1034, Kiel Institute for the World Economy (IfW Kiel).
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Saleh Abdul Mola Al-Zaroog & Dr. Amer Abdul Fatah Baqir, 2020. "The Impact of Global Innovation on Economic Growth in Developing Countries," Journal of Social Sciences (COES&RJ-JSS), , vol. 9(2), pages 373-393, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Urrunaga, Roberto & Aparicio, Carlos, 2012. "Infrastructure and economic growth in Peru," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    2. Dushko, Josheski & Darko, Lazarov & Cane, Koteski, 2011. "Analysis of the optimal size of the government consumption," MPRA Paper 32063, University Library of Munich, Germany.
    3. Ward Romp & Jakob De Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(S1), pages 6-52, April.
    4. Mohanty, Biswajit & Bhanumurthy, N. R. & Dastidar, Ananya Ghosh, 2017. "What explains Regional Imbalances in Infrastructure?: Evidence from Indian States," Working Papers 17/197, National Institute of Public Finance and Policy.
    5. Niloy Bose & M. Emranul Haque & Denise R. Osborn, 2007. "Public Expenditure And Economic Growth: A Disaggregated Analysis For Developing Countries," Manchester School, University of Manchester, vol. 75(5), pages 533-556, September.
    6. repec:cuf:journl:y:2014:v:15:i:2:calderon:serven is not listed on IDEAS
    7. Chatterjee, Santanu & Sakoulis, Georgios & Turnovsky, Stephen J., 2003. "Unilateral capital transfers, public investment, and economic growth," European Economic Review, Elsevier, vol. 47(6), pages 1077-1103, December.
    8. Pierre‐Richard Agénor, 2011. "Schooling and Public Capital in a Model of Endogenous Growth," Economica, London School of Economics and Political Science, vol. 78(309), pages 108-132, January.
    9. Clausen, Volker & Schürenberg-Frosch, Hannah, 2012. "Aid, spending strategies and productivity effects: A multi-sectoral CGE analysis for Zambia," Economic Modelling, Elsevier, vol. 29(6), pages 2254-2268.
    10. Caselli, Francesco, 2005. "Accounting for Cross-Country Income Differences," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 9, pages 679-741, Elsevier.
    11. Coviello, Decio & Islam, Roumeen, 2006. "Does aid help improve economic institutions ?," Policy Research Working Paper Series 3990, The World Bank.
    12. Silvia Bertarelli, 2006. "Public capital and growth," Politica economica, Società editrice il Mulino, issue 3, pages 361-398.
    13. Schürenberg-Frosch, Hannah, 2012. "Determinants of transport costs: Are they uniform across countries?," Economics Discussion Papers 2012-54, Kiel Institute for the World Economy (IfW Kiel).
    14. Pereira, Ricardo Antonio de Castro & Ferreira, Pedro Cavalcanti, 2006. "Impactos de bem-estar da privatização de infra-estrutura," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 633, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    15. Diaz-Bautista, Alejandro, 2002. "The role of telecommunications infrastructure and human capital: Mexico´s economic growth and convergence," ERSA conference papers ersa02p102, European Regional Science Association.
    16. Michael Regan, 2017. "Capital Markets, Infrastructure Investment and Growth in the Asia Pacific Region," IJFS, MDPI, vol. 5(1), pages 1-28, February.
    17. Angel De la Fuente, 2010. "Infrastructures and productivity: an updated survey," Working Papers 1018, BBVA Bank, Economic Research Department.
    18. Agénor, Pierre-Richard & Neanidis, Kyriakos C., 2015. "Innovation, public capital, and growth," Journal of Macroeconomics, Elsevier, vol. 44(C), pages 252-275.
    19. Ha T.T. Vu & Robert D. Ebel, 2014. "Rural Roads: Multi-Tier Monitoring of Infrastructure: Top Down and Bottom Up," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1414, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    20. Mary Morrison & Marianne Fay, 2005. "Infrastructure in Latin America : Recent Developments and Key Challenges, Volume 1," World Bank Publications - Reports 8801, The World Bank Group.
    21. Aghion, Philippe & Akcigit, Ufuk & Cagé, Julia & Kerr, William R., 2016. "Taxation, corruption, and growth," European Economic Review, Elsevier, vol. 86(C), pages 24-51.

    More about this item

    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:taf:rrpaxx:v:16:y:2011:i:2:p:95-116. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RRPA20 .

    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.