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On the Optimal Government Size in Europe: Theory and Empirical Evidence
Author(s) -
Karras Georgios
Publication year - 1997
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/1467-9957.00057
Subject(s) - government (linguistics) , productivity , economics , empirical evidence , public economics , marginal product , government spending , production (economics) , government failure , public finance , macroeconomics , market economy , philosophy , linguistics , epistemology , welfare
The optimal government size for the representative European country is estimated by investigating the role of public services in the production process. The empirical results support the following conclusions: (i) government services are significantly productive; (ii) there is no evidence that government services (on average) are not optimally provided; (iii) the optimal government size is 16 per cent (±3 per cent) for the average ICP European country; (iv) the marginal productivity of government services may be negatively related to government size.