K. de Witte
- Sizing the government
- Public Choice
- Volume | Issue number
- 145 | 1-2
- Pages (from-to)
- Document type
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
Is there such a thing as an optimal government size? We investigate the so-called Armey curve, which claims an inverted U-shaped relationship between government size and economic performance, using non-parametric Data Envelopment Analysis (DEA). The DEA scores are linked to control variables, such as initial per capita income, openness, population density, urbanization, country size and family size. For 23 OECD-countries we estimate the country specific efficiency scores, which reveal the extent to which a country uses excess public resources to achieve the observed growth rate of GDP.
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