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Public Choice

, Volume 145, Issue 1–2, pp 39–55 | Cite as

Sizing the government

  • Kristof De WitteEmail author
  • Wim Moesen
Open Access
Article

Abstract

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.

Keywords

Data envelopment analysis Government size Public sector performance Armey-curve 

JEL Classification

H10 H21 H31 

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Copyright information

© The Author(s) 2009

Open AccessThis is an open access article distributed under the terms of the Creative Commons Attribution Noncommercial License (https://creativecommons.org/licenses/by-nc/2.0), which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.

Authors and Affiliations

  1. 1.Center for Economic StudiesKatholieke Universiteit Leuven (KUL)LeuvenBelgium
  2. 2.Top Institute for Evidence Based Education ResearchMaastricht UniversityMaastrichtThe Netherlands

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