Does public sector efficiency matter?:revisiting the relation between fiscal size and economic growth in a world sample

Angelopoulos, Konstantinos and Philippopoulos, Apostolis and Tsionas, Michael (2008) Does public sector efficiency matter?:revisiting the relation between fiscal size and economic growth in a world sample. Public Choice, 137 (1-2). pp. 245-278. ISSN 0048-5829

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Abstract

This paper revisits the relationship between fiscal size and economic growth. Our work differs from the empirical growth literature because this relationship depends explicitly on the efficiency of the public sector. We use a sample of 64 countries, both developed and developing, in four five-year time periods between 1980 and 2000. Building on the work of Afonso et al. (Public Choice 123:321–347, 2005), we construct a measure of public sector efficiency in each country and each time period by calculating an output-to-input ratio. In addition, we get an estimate of technical efficiency of public spending for 52 countries from 1995 to 2000 by employing a stochastic frontier analysis. Using these two measures, we find evidence of a non-monotonic relation between fiscal size and economic growth that depends critically on the size-efficiency mix.

Item Type: Journal Article
Journal or Publication Title: Public Choice
Uncontrolled Keywords: /dk/atira/pure/subjectarea/asjc/3300/3312
Subjects:
Departments: Lancaster University Management School > Economics
ID Code: 65259
Deposited By: ep_importer_pure
Deposited On: 18 Jun 2013 08:24
Refereed?: Yes
Published?: Published
Last Modified: 11 Feb 2020 08:12
URI: https://eprints.lancs.ac.uk/id/eprint/65259

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