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This paper empirically investigates how government consumption impacts upon economic growth in Tanzania for the period 1967 – 2020. Autoregressive Distributed Lag (ARDL) bounds cointegration test revealed economic growth and government expenditure were cointegrated, given the conditioning factors; and, revealed a small but statistically significant positive long run effect of government size on economic growth. The pairwise Granger causality test rejected the null hypothesis of no uni-directional or bi-directional causality between the government size and economic growth. The study also established the long run effect of inflation on economic growth was negative and statistically significant. The ECM results reveal the short run effect of government size on economic growth was negative and statistically insignificant; and, the effect of private investment on economic growth was positive and statistically insignificant. Besides, the short run effect of human capital on economic growth was negative and weakly significant. The results revealed a high speed of adjustment from disequilibrium to long run equilibrium. The findings support the conventional view: government consumption lacks significant positive effect on growth over the long run. This finding reveals the limit to the use of fiscal policy especially recourse to government expenditure to prime or stabilize the economy as maintained in Keynesian macroeconomic theory. The gestation period of government consumption is long. Furthermore, the finding underscore importance of price stability and, other things being constant, need for more proactive policies and strategies to avail business and macroeconomic environment that would increase private investment.

Audit Delay In the governmentthe timeliness of financial reports plays a role in the framework of making government decisions as a form of accountability to the public. The purpose of this study was to determine the effect of SKPD Complexity, Government Size, Budget Absorption, and Audit Opinion on Audit Delay.The number of samples taken was 35 local government samples in Central Java on 2017-2021 after being outlined to 156 data. This study used purposive sampling during a certain period. Data were analyzed using the CLT (Central Limit Theorem) method to determine the magnitude of the influence of the independent variables on the dependent variable using multiple linear regression analysis which was processed by SPSS23.Based on the test results, it was concluded that SKPD Complexity=0.014, Budget Absorption=0.044 and audit opinion=0.010 has effect on audit delay for Government Size doesn’t affect audit delay.For Test f=4.124 and Adjusted R Square of 7.5%. This shows that the audit delay that occurred in local governments in Central Java on 2017-2021 can be explained by the independent variables (Complexity, Absorption, Size, Opinion).The remaining 93.5% is influenced by variables or other factors outside the model under study, {"references":["Aprilia, N., Fachruzzaman, &Pratiwi, S. D. 2017. \"The Influence of Audit Opinion and Auditor Quality on Audit Delay in District/City Governments in Indonesia\". Vol. 7, (3).","Bakar, Putra M. & Arza, Indra F. 2019. \"The Influence of Local Government Size, Audit Opinion, and Leverage on Audit Delay\" Journal of Exploration Accounting, Vol. 1, (3) : 1168-1183.","Frasti, Erlisa H, Dita, Purba E., Prachinthea, E., Syahputra, Ade, Widyawati, Arini, &Hananto, Tri S. 2017. \"Characteristics of Regional Heads and Delay Audit of Local Government Financial Statements in Indonesia\", Journal of Accounting, 2017, Vol 21 (1): 21–34.","Fuad, Khoirul&Wiradinata, Dilla S. 2020. \"How important is audit report lag in local government that needs to be disclosed?\" Dynamics of Financial Accounting & Banking, 2020, Vol. 9, (2): 145 – 154s.","Ghozali, Imam. 2013. Application of Multivariate Analysis with the IBM SPSS Program.Semarang: Diponegoro University Publishing Agency","Gujarati, D. (2003). Basic Econometrics. (S. Zain, Ed.). Jakarta: Erlangga","Hapsari, Angelia &Purwaningsih, E. 2018. \"The Effect of Audit Delay Subosukowonosatren Local Government Agencies in 2009-2014\" Accounting Media, Vol. 30,(1)","Halim, Abdul. 2018. Auditing (Fundamentals of Financial Statement Auditing), Yogyakarta:UPP STIM YKPN"]}

Background: The aim of the current research was to studying the impacts of the government size on an economic growth of Iraq. In spite of the high rate of the government spending, there are no good impact on economic growth. Methods: Data was collected from Central Bank of Iraq, including, the dependent variables, which were Gross domestic product and annual growth. We have used the ARDL method to analyses the data using canonical correlation analysis. The study included the effect relationship between the independent variables and the dependent variables, each independently. In addition the multiple linear regresion equation and tests (T), test (F) to test the significance, and coefficients of determination or interpretation (R2) to find out the percentage of interpretation of the independent variable from the dependent variable was used. Results: the findings of research based on estimation of the regression model using ARDL showed that the government size has a positive and statistically significant effect on Iraqi economic growth. Conclusion:It was noted that fluctuations in crude oil prices are directly reflected on oil revenues and thus on the volume of public expenditures, which affects the economic growth.

This article analyzes the implementation of fiscal limit targets and their influence on government size and productivity of public expenditures in Brazilian municipalities between 2005 and 2016. For this purpose, a panel data model was estimated, using the differences in differences empirical strategy and applying the Fiscal Responsibility Law (FRL), subdivided into three categories as the main interest variable, in order to identify the municipalities that have complied with the payroll limit; those who met the public debt limit; and those who met both limits. Results obtained demonstrated that the adoption of fiscal targets positively affected public finance management through the compliance with public debt limits, as this promotes a reduction in government size. Besides, municipalities that abide to the FRL reduce their government size, whereas their GDP per capita, improves. On the other side, when the municipal manager belongs to same party as the state governor there is an increase in the government size. In view of the results, it is recommended that stricter measures be adopted in the application of the Fiscal Responsibility Law, in order to provide greater efficiency in the management of public spending – smaller government and productive spending –, especially in election years. Resumo: O artigo analisa se a implantação de limites de metas fiscais influi no tamanho do governo e na produtividade dos gastos públicos nos municípios brasileiros entre 2005 e 2016. Para isso, estimou-se um modelo de dados em painel, utilizando-se a estratégia empírica de diferenças em diferenças e tendo como principal variável de interesse a Lei de Responsabilidade Fiscal (LRF), desagregada em três categorias, a fim de identificar os municípios que cumpriram o limite para a folha de pagamento; os que cumpriram o limite para a dívida pública; e aqueles que cumpriram ambos os limites. Dentre os resultados, constatou-se que a adoção dos limites de metas fiscais influenciou positivamente a gestão das finanças públicas, via cumprimento do limite para a dívida pública, já que este promove uma redução no tamanho do governo. Além disso, municípios que cumprem a LRF têm uma redução no tamanho do governo diante de aumentos no PIB per capito, por exemplo. Por outro lado, se o gestor municipal pertencer ao mesmo partido do governador, há um aumento em seu tamanho. Diante dos resultados, recomenda-se que medidas mais rigorosas na aplicação da Lei de Responsabilidade Fiscal sejam adotadas, a fim de propiciar uma maior eficiência na gestão dos gastos públicos – governo menor e gastos produtivos –, sobretudo em anos eleitorais. Resumen: El artículo analiza si la implementación de los límites de las metas fiscales influye en el tamaño del gobierno y la productividad del gasto público en los municípios brasileños entre 2005 y 2016. Para ello, se estimó un modelo de datos de panel, utilizando la estrategia empírica de diferencias en diferencias y cuya principal variable de interés fue la Ley de Responsabilidad Fiscal (LRF), desglosada en tres categorías, con el fin de identificar los municipios que cumplieron con el límite de nómina; los que cumplieron con el límite de la deuda pública; y los que cumplieron con ambos límites. Entre los resultados, se encontró que la adopción de límites de metas fiscales influyó positivamente en la gestión de las finanzas públicas, a través del cumplimiento del límite de deuda pública, ya que esto promueve una reducción en el tamaño del gobierno. Además, los municípios que cumplen con la LRF tienen una reducción en el tamaño del gobierno ante aumentos en el PIB per cápita, por ejemplo. Por otro lado, si el administrador municipal pertenece al mismo partido que el gobernador, hay un aumento de tamaño. A la vista de los resultados, se recomienda que se adopten medidas más estrictas en la aplicación de la Ley de Responsabilidad Fiscal, a fin de brindar mayor eficiencia en la gestión del gasto público – menor gasto gubernamental y productivo –, especialmente en años electorales.

One indicator that reflects good regional financial management is transparency. Transparency can be seen from other users to realize good, clean, and responsible governance. One form of transparency that can be taken by regional heads is by disclosing local government financial reports. The purpose of this study is to analyze the effect of government performance, level of government dependence, government wealth, and government size. The population in this study is Regency/City located in Central Java in 2017-2020. The sample in this study was taken using purposive sampling with a final sample of 140 samples used. The method of analysis used multinomial logistic analysis with the help of the SPSS program. The results of this study indicate that government performance, level of government dependence, and government size affect the voluntary graphics disclosure in districts/cities in Central Java in 2017-2020. Meanwhile, government wealth has no effect on voluntary graphics disclosure in districts/cities in Central Java in 2017-2020., {"references":["Abeywardana, N. L. E., dan Panditharathna, K. M. (2016). The Extent and Determinants of Voluntary Disclosures in Annual Reports: Evidence from Banking and Finance Companies in Sri Lanka. Accounting and Finance Research, 5(4). https://doi.org/10.5430/afr.v5n4p147","Achmad, T., Faisal, F., dan Oktarina, M. (2017). Factors influencing voluntary corporate risk disclosure practices by Indonesian companies. Corporate Ownership and Control, 14(3), 286–292. https://doi.org/10.22495/cocv14i3c2art2","Achmad, T., Faisal, F., dan Oktarina, M. (2017). FACTORS INFLUENCING VOLUNTARY CORPORATE RISK DISCLOSURE PRACTICES BY INDONESIAN COMPANIES. Corporate Ownership dan Control, 14. http://creativecommons.org/licenses/by/4.0/","Agustianti, S., dan Verawaty, D. (n.d.). ANALISIS DETERMINAN VOLUNTARY GRAPHICS DISCLOSURE PADA PEMERINTAH DAERAH PROVINSI DI INDONESIA","Arslan-Ayaydin, Ö., Bishara, N., Thewissen, J., dan Torsin, W. (2020). Managerial career concerns and the content of corporate disclosures: An analysis of the tone of earnings press releases. International Review of Financial Analysis, 72. https://doi.org/10.1016/j.irfa.2020.101598","Arslan-Ayaydin, Ö., Bishara, N., Thewissen, J., dan Torsin, W. (2020). Managerial career concerns and the content of corporate disclosures: An analysis of the tone of earnings press releases. International Review of Financial Analysis, 72. https://doi.org/10.1016/j.irfa.2020.101598","Bhasin, M., Makarov, R., dan Orazalin, N. (2015). Determinants of Voluntary Disclosure in the Banking Sector: An Empirical Study. International Journal of Contemporary Business Studies, 3(3), 60–71.","Bilal, B., Sehar, N., dan Tufail, S. (2013). Determinants of Voluntary Disclosure in Annual Report: A Case Study of Pakistan. Management and Administrative Sciences Review. 181–195."]}

Doutoramento em Economia Since the Great Recession (2007 - 2009) and especially during the Coronavirus pandemic (2020 – 2022), there has been a growing interest in the effects of fiscal policy to drive economies towards sustainable growth. In this sense, fiscal policy can provide the instruments to correct market failures and influence the trajectory of economic activity. However, there is no consensus among scholars and policy-makers on the topic or the (in)effectiveness of the instruments. Nevertheless, it is possible to point out some causes for the imprecision of fiscal effects, such as uncertainty and distrust in national institutions. Briefly, two strands of economic thought guide the conduct of fiscal policies. The first strand claims that the economy must be guided by market self-regulation for effective development. On the other hand, the second group advocates that the government must intervene and regulate economic relations. Between the Great Depression (1929 - 1939) and the beginning of World War II (1939 – 1945), the second group stood out on the governments' agenda and the orientation was of fiscal stimulus to boost employment and smoothen the business cycle. This orientation stood out until the mid-1960s with the rise of monetarism, driven by the Chicago School. Thus, criticisms arose about the effectiveness of fiscal instruments, as they would be incapable of producing short-term effects and, therefore, would not compete with the speed of monetary stimulus, owing to long internal lags for fiscal changes and long external lags for implementing government investment. However, at the beginning of the 21st century, some economists argued that the discredited fiscal policy was back. They underline that, in the light of more conventional theory or historical evidence, monetary policy is efficient in containing high inflation, however, it has limitations in scenarios of high uncertainty, recession and low inflation rates. In this context, this thesis focuses on the macroeconomic impact of public spending in uncertainty scenarios, the influence of trust in government, and corruption on economic performance. The thesis addresses four main questions: what is the effect of public spending on economic activity in times of high and low uncertainty? What is the impact of corruption on economic performance? Is this effect smaller in governments with less interference in the economy (small governments)? How does the quality of public expenditure management affect the citizens' trust and economic activity? The second chapter investigates the influence of uncertainty on the effectiveness of government spending for the United States (U.S.) and Brazil. The findings suggest a positive impact of public spending on economic activity, indicating Keynesian effects on consumption and Gross Domestic Product (GDP). In order to assess the effects of uncertainty, two uncertainty proxies are used, i.e., the Economic Policy Uncertainty Index (EPU) and the World Uncertainty Index (WUI). The models indicate that fiscal effects are considerably less intense when uncertainty reaches high levels. Therefore, agents are more cautious when uncertainty obscures the outline of the economic scenario, hindering agents' decisions, reducing consumption, investment and economic activity, in line with the Real Options (R.O.) approach. The third chapter deepens the analysis of the relationship between uncertainty and economic activity. In this sense, another uncertainty index is used: the market expectation of volatility by stock index option prices (Chicago Board Options Exchange Volatility Index - VIX index). This chapter addresses three main issues: First, the chapter assesses the impact of public consumption shocks on the economy. Next, the chapter analyses the interference of uncertainty shocks on economic activity. Lastly, it investigates the extent to which uncertainty shocks attenuate the economic effect of increasing public consumption. To examine these issues, the essay is divided into two parts. Initially, empirical models are used for the U.S., Brazil and a panel with six European countries. The chapter then highlights a dynamic stochastic general equilibrium (DSGE) model. Lastly, the empirical and theoretical simulations are superimposed, and the adherence of the theoretical model to the data is analysed. The findings suggest that when the economy is hit by a simultaneous shock of uncertainty and public consumption, it obscures the effectiveness of the fiscal stimulus on the economy, corroborating the empirical results. After analysing the interaction of uncertainty with public spending and GDP, chapter four evaluates a second transmission channel. The models examine whether the level of corruption associated with countries with high public spending (big governments) affects GDP. Thus, dynamic models and the Generalised Method of Moments (GMM) approach are used for a panel of 48 countries. The findings point to a significant adverse effect of corruption on GDP per capita (level and growth), but big governments benefit less from reducing corruption. Furthermore, developing economies benefit less from reducing corruption regardless of government size. Thus, the government size is not sufficient to explain the influence of corruption on economic activity, although the level of effectiveness of public services is crucial. Lastly, the models suggest that private investment is a potential transmission channel for corruption. Corruption and trust are complex aspects of interpersonal and organisational relationships, greasing the wheels of relationships between agents and public institutions. Thus, chapter five is organised into two main parts. The first one assesses the effects of ineffective government spending on public trust and whether there is evidence of a trust trap. Lastly, the essay analyses how public trust affects economic activity. This essay employs dynamic regression models and the GMM for panel models. The findings point to a significant adverse impact of ineffective government spending (IGS) on trust in government (TIG), confirming theoretical assumptions. The models also highlight a threshold in the relationship between trust and IGS, i.e., a trust trap. Briefly, to a certain extent, it is possible to regain trust by reducing the ineffectiveness of government spending. However, after this threshold, the recovery of trust requires a significant effort from governments. Lastly, the models suggest that increases in TIG foster economic activity. Therefore, this thesis indicates that in highly unpredictable economies or where there is little TIG from citizens, regardless of the increase in government spending, the responses of households and entrepreneurs are compromised and hence there is no stimulus for investments or private consumption. In this context, the findings suggest that fiscal impulses positively influence household consumption and economic performance. Nevertheless, for a more effective impact of fiscal instruments, it is necessary to develop attitudes and coordinated public policies that inhibit the noxious effects of uncertainty and mistrust indicated through the different transmission channels. Desde a crise financeira (2007/2008) e especialmente durante a pandemia do Coronavírus, tem havido um interesse crescente nos efeitos da política orçamental para impulsionar as economias em direção ao crescimento sustentável. Nesse sentido, a política orçamental pode fornecer os instrumentos para corrigir as falhas de mercado e influenciar a trajetória da atividade económica. No entanto, não há um consenso entre os estudiosos e formuladores de políticas sobre o tema ou sobre a (in)eficácia dos instrumentos. Ainda assim, é possível apontar algumas causas para a imprecisão dos efeitos fiscais, como a incerteza e a desconfiança nas instituições nacionais. Resumidamente, duas linhas de pensamento económico orientam a condução da política orçamental. A primeira vertente defende que a economia deve ser guiada pela autorregulação do mercado para um desenvolvimento efetivo. Por outro lado, o segundo grupo advoga que o governo deve intervir e regular as relações económicas. Após a Grande Depressão (1930) e o início da Segunda Guerra Mundial, o segundo grupo destacou-se na agenda dos governos nacionais e a orientação foi de estímulo fiscal para impulsionar o emprego e atenuar o ciclo económico. Essa orientação destacou-seaté meados da década de 1960, com a ascensão do monetarismo, impulsionado pela Escola de Chicago. Assim, surgiram críticas acerca da eficácia dos instrumentos fiscais, pois seriam incapazes de produzir efeitos de curto prazo e, portanto, não competiriam com a velocidade do estímulo monetário, devido a longas defasagens internas para alterações fiscais e longas defasagens externas para a implementação do investimento do governo. No entanto, no início do século XXI, alguns economistas argumentaram que a desacreditada política orçamental estava de volta. Eles ressaltam que, à luz da teoria mais convencional ou das evidências históricas, a política monetária é eficiente na contenção da inflação elevada, porém apresenta limitações em cenários de alta incerteza, recessão e baixas taxas de inflação. Nesse contexto, esta tese tem como enfoque o impacto macroeconómico do gasto público em cenários de incerteza, a influência da confiança no governo e da corrupção no desempenho económico. Portanto, a tese aborda quatro questões principais: qual é o efeito do gasto público na atividade económica em tempos de alta e baixa incerteza? Qual é o impacto da corrupção no desempenho económico? Esse efeito é menos intenso em governos com menor interferência na economia (governos pequenos)? Como a qualidade da gestão do gasto público afeta a confiança dos cidadãos e a atividade económica? O segundo capítulo investiga a influência da incerteza na eficácia dos gastos governamentais para os Estados Unidos e o Brasil. Os resultados sugerem um impacto positivo do gasto público sobre a atividade económica, indicando efeitos keynesianos sobre o consumo e o Produto Interno Bruto (PIB). Para avaliar os efeitos da incerteza, duas proxies de incerteza são usadas, ou seja, o Índice de Incerteza de Política Económica e o Índice de Incerteza Mundial. Os modelos indicam que os efeitos fiscais são consideravelmente menos intensos quando a incerteza atinge níveis elevados. Portanto, os agentes são mais cautelosos quando a incerteza obscurece o contorno do cenário económico, dificultando as decisões dos agentes, reduzindo o consumo, o investimento e a atividade económica, em linha com a abordagem das Opções Reais. O terceiro capítulo aprofunda a análise da relação entre incerteza e atividade económica. Nesse sentido, outro índice de incerteza é utilizado: a expectativa de mercado da volatilidade dos preços das opções de índices de ações (Chicago Board Options Exchange Volatility Index - índice VIX). Este capítulo aborda três questões principais: inicialmente, o ensaio avalia o impacto dos choques de consumo público na economia. Em seguida, o capítulo analisa a interferência de choques de incerteza sobre a atividade económica. Por fim, o capítulo investiga até que ponto os choques de incerteza atenuam o efeito económico do aumento do consumo público. Para examinar essas questões, o ensaio está dividido em duas partes. Inicialmente, são utilizados modelos empíricos para os EUA, Brasil e um painel com seis países europeus. O capítulo então destaca um modelo de equilíbrio geral estocástico dinâmico. Finalmente, são comparadas as simulações (empíricas e teóricas) e analisada a aderência do modelo teórico aos dados. Os resultados sugerem que quando a economia é atingida por um choque simultâneo de incerteza e consumo público, isso obscurece a eficácia do estímulo fiscal sobre a economia, corroborando os resultados empíricos. Depois de analisar a interação da incerteza com os gastos públicos e o PIB, o capítulo quatro avalia um segundo canal de transmissão. O ensaio examina se o nível de corrupção associado a países com altos gastos públicos (governos grandes) afeta o PIB. Assim, modelos dinâmicos e a abordagem Generalised Method of Moments (GMM) são usados para um painel de 48 países. Os resultados apontam para um efeito adverso significativo da corrupção sobre o PIB per capita (nível e crescimento), mas os grandes governos se beneficiam menos da redução da corrupção. Além disso, as economias em desenvolvimento se beneficiam menos da redução da corrupção, independentemente do tamanho do governo. Desta forma, o tamanho do governo não é suficiente para explicar a influência da corrupção na atividade económica, embora o nível de eficácia dos serviços públicos seja crucial. Por último, os modelos sugerem que o investimento privado é um potencial canal de transmissão da corrupção. A corrupção e a confiança são aspectos complexos das relações interpessoais e organizacionais, lubrificando as rodas das relações entre agentes e instituições públicas. Assim, o capítulo cinco está organizado em duas partes principais. A primeira avalia os efeitos de gastos governamentais ineficazes na confiança pública e se há evidências de uma armadilha de confiança. Por fim, o ensaio analisa como a confiança pública afeta a atividade económica. Este ensaio utiliza modelos de regressão dinâmica e o GMM para modelos em painel. Os resultados apontam para um significativo impacto adverso dos gastos governamentais ineficazes sobre a confiança no governo, confirmando os pressupostos teóricos. Os modelos também destacam um limiar na relação entre confiança e gastos governamentais ineficazes, ou seja, uma armadilha de confiança. Resumidamente, até certo ponto, é possível recuperar a confiança reduzindo a ineficácia dos gastos do governo. No entanto, após esse limiar, a recuperação da confiança exige um esforço significativo dos governos. Por fim, os modelos sugerem que aumentos na confiança no governo estimulam a atividade económica. Portanto, esta tese indica que em economias altamente imprevisíveis ou onde há pouca confiança dos cidadãos no governo, independentemente do aumento dos gastos do governo, as respostas das famílias e dos empresários ficam comprometidas e, portanto, não há estímulo para investimentos ou consumo privado. Nesse contexto, os resultados sugerem que os impulsos fiscais influenciam positivamente o consumo das famílias e o desempenho económico. No entanto, para um impacto mais efetivo dos instrumentos fiscais, é necessário desenvolver atitudes e políticas públicas coordenadas que inibam os efeitos nocivos da incerteza e desconfiança indicados pelos diferentes canais de transmissão. info:eu-repo/semantics/publishedVersion

As a provider of public goods and a corrector of externalities, the government has a significant effect on the local environment. Based on annual province-level data from 1998 to 2015, this paper decomposes the changes in sulfur dioxide emissions into end pollution control effects and source pollution control effects by a complete decomposition model. It then uses a spatial econometric model to investigate how government size expansion affects sulfur dioxide emissions. The results show that under the promotion system based on appointment, the local government size and the neighboring government size are not conducive to reducing local sulfur dioxide emissions. With the expansion of the government size, the degree of environmental degradation caused by competition among governments is more serious. In the way of influence, the impact of local government size on the sulfur dioxide emissions is mainly through restraining the effect of end pollution control. The impact of neighboring government size on the sulfur dioxide emissions is mainly through weakening the effect of source pollution control.

What lessons does prior research on causes of corruption offer public administrators operating in, and researchers studying the dynamics of, public sectors of most governments developing societies? In this paper we summarize a voluminous body of prior economic, social and political science research that tells us about the roots of corruption in public sector of developing countries. Informing the analysis is a "review of reviews" of a sprawling research that examines six indicators: government size, oil revenue, democracy, quality of bureaucracy, rule of law, and human development; that are assumed to be major factors in increasing or decreasing the level of corruption in developing societies. We discern from this formidable body of research what is known about causes of corruption, what is left to know, and how useful the prior research could become panacea for encountering administrative corruption of developing countries. Finally, based on research findings, suggestions for future research are presented, {"references":["Acemoglu, D., Johnson, S., & Robinson, J. (2001). The colonial origins of comparative development: An empirical investigation. American economic review 91.","Acemoglu, D., Johnson, S., & Robinson, J. (2001). The colonial origins of comparative development: An empirical investigation. American economic review, 91(5), 1369-1401.","Acemoglu, D., Johnson, S., & Robinson, J. (2002). Reversal of fortune: Geography and institutions in the making of the modern world income distribution. The Quarterly journal of economics, 117(4), 1231-1294.","Akçay, S. (2002). Corruption, democracy and bureaucracy: Empirical evidence from developing countries. Gazi Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 4(1), 205-218.","Akhter, S. H. (2004). Is globalization what it's cracked up to be? Economic freedom, corruption, and human development. 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In the process of globalization, many countries that have removed the barriers to international trade have increased the level of openness of their foreign trade. The increase in the level of trade openness has made countries more open to risks arising from the international system. This situation has revealed the possibility of affecting the size of the public sector. China has gradually increased foreign direct investments within the scope of the open-door policy that it has started to implement since the end of the 1970s. Since the 1990s, it has liberalized its trade and carried its share in world trade to the top. The main problematic of this study is how the size of the public sector was affected by this development in China, which significantly increased the level of trade openness while transitioning from a socialist model to a socialist market economy. For this purpose, annual data on trade openness and public sector size for the period 1990-2021 were used in the study. A long-term relationship was found between the variables in the examination made with the help of the Banerjee et al. (2017) fourier ADL cointegration test. According to Hacker & Hatemi-J (2012) causality test results, one-way causality was determined from trade openness to public sector size. As a result of the findings, it was concluded that trade openness increased the size of the public sector in China and the compensation hypothesis was valid., Küreselleşme sürecinde uluslararası ticaret önündeki engelleri kaldıran pek çok ülke dış ticaretlerinin açıklık düzeyini arttırmışlardır. Ticari açıklık düzeyinin artması ülkeleri uluslararası sistemden kaynaklanan risklere daha açık hale getirmiştir. Bu durum ise kamu kesimi büyüklüğünü etkileme ihtimalini ortaya çıkarmıştır. Çin 1970’lerin sonundan itibaren uygulamaya başladığı açık kapı politikası kapsamında doğrudan yabancı yatırımları kademeli olarak arttırmıştır. 1990’lardan itibaren de ticaretini serbestleştirerek dünya ticareti içindeki payını ilk sıralara taşımıştır. Sosyalist bir modelden sosyalist piyasa ekonomisine geçerken ticari açıklık seviyesini önemli ölçüde arttıran Çin’de kamu kesimi büyüklüğünün bu gelişmeden nasıl etkilendiği çalışmanın temel sorunsalını oluşturmaktadır. Bu amaçla çalışmada, 1990 -2021 döneminde ticari açıklık ve kamu kesimi büyüklüğüne ait yıllık veriler kullanılmıştır. Banerjee vd. (2017) fourier ADL eşbütünleşme testi yardımı ile yapılan incelemede değişkenler arasında uzun dönemli bir ilişki bulunmuştur. Hacker ve Hatemi-J (2012) nedensellik testi sonuçlarına göre ticari açıklıktan kamu kesimi büyüklüğüne doğru nedensellik tespit edilmiştir. Elde edilen bulgular neticesinde Çin’de ticari açıklığın kamu kesimi büyüklüğünü arttırdığı ve telafi hipotezinin geçerli olduğu sonucuna ulaşılmıştır.

The expansion of government size will have dual effects on a country’s green innovation. An appropriately sized government size increases marginal productivity and stimulates the development of green innovation by increasing government expenditure. On the contrary, an excessively sized government creates a huge administrative agency, which not only increases the tax burden but also damages social welfare by excessive intervention. Therefore, the effect of government size on green innovation is not linear. In order to prove this proposition, this study examines the impact of government size on green innovation in 166 countries between 1995 and 2018, using a two-way fixed effects model. The results reveal an inverted U-shaped relationship between government size and the level of green innovation, indicating that optimal government size may maximize a country’s green innovation output. The results further suggest that this inverted U-shaped relationship is mainly influenced by environmental regulations and financial support. Finally, our heterogeneity analysis demonstrates that the inverted U-shaped relationship is more pronounced for countries with high organizational inertia and more R&D expenditure than for those with low organizational inertia and less R&D expenditure. This finding makes up for the research gap between government size and green innovation and provides a reference for countries to formulate the optimal government size to improve the level of green innovation.

Our paper intersects two topics in growth theory: the growth maximizing government size and the role of Social Capital in development. We modify a simple overlapping generations framework by introducing two key features: a production function à la Barro together with the possibility that public officials steal a fraction of public resources under their own control. As underlined by the literature on corruption, Social Capital affects public officials' accountability through many channels which also affect the probability of being caught for embezzlement and misappropriation of public resources. Therefore, in our endogenous growth model such probability is taken as a proxy of Social Capital. We find that maximum growth rates are compatible with Big Government size, measured both in terms of expenditures and public officials, when associated with high levels of Social Capital.

Noting that few studies to date have investigated the determinants of social cohesion in a comprehensive and systematic manner, this paper examines the macro-level determinants of social cohesion using a panel of up to 92 developing and developed countries for the period 1990–2020. Employing the system GMM dynamic panel data estimator, which addresses endogeneity concerns by means of internal instruments, I find that the levels of education, government size, globalisation, and economic development have significantly positive effects on most dimensions of a country’s social cohesion. In contrast, inflation, corruption and income inequality are detrimental to social cohesion., IDOS Discussion Paper

I show that the weather condition on election day affects future fiscal policy. When it rains during state elections, there is an increase in the relative income of voters, which is followed by an increase in expenditure and debt. The increase in expenditure is directed towards a larger police and safety budget. This result is compatible with a model of complementarity between consumption and public goods. In the model, high-income voters support an increase in safety budget because they benefit more from it than low-income voters.

Research background: Output volatility has potentially adverse consequences on the economy and the stabilizing role of fiscal policy is linked to the share of government size in an economy. Hence, given the relative large share of government in developing countries, government size is expected to play an important role in stabilizing output volatility. Purpose: This study examines the relationship between output volatility and government size in Nigeria. The study seeks to establish if government size mitigates output volatility in Nigeria. Research methodology: The study employs the Autoregressive Distributed Lag (ARDL) technique after conducting stationarity and co-integration tests. Results: The results of the ARDL estimate showed that government size lessens output volatility but the magnitude was insignificant. Further, the study found that volatility in aggregate government spending; international oil price and public debt were significant determinants of output volatility in Nigeria. Novelty: This showed that the automatic stabilization role of government size on output volatility could not be established. The automatic stabilization role of fiscal policy can be improved by increasing social security transfers (pension payment), payments of unemployment benefits and increasing civil servants minimum wage.

The aim of this research to investigate the effect of government size on regional economic growth in Indonesia. This study uses panel data analysis with using two years of interval data from 2009 until 2015. The results showed that government size has a significant effect on economic growth and it has a non-linear relationship. According the estimation from the model, the threshold government size on regional economic growth is 38.98%. Above the threshold, an increase in government size will instead have a negative effect on economic growth. ------------------------------------------ Penelitian ini bertujuan untuk meneliti pengaruh government size terhadap pertumbuhan ekonomi daerah di Indonesia. Penelitian ini menggunakan analisis data panel dengan menggunakan data dua tahun interval dari tahun 2009 hingga 2015. Hasil penelitian menunjukkan bahwa government size berpengaruh signifikan terhadap pertumbuhan ekonomi daerah dan berpengaruh secara tidak linier. Berdasarkan hasil model, dapat dihitung bahwa threshold untuk government size terhadap pertumbuhan ekonomi daerah adalah sebesar 38,98%. Jika pertumbuhan ekonomi daerah lebih dari itu, peningkatan government size akan berdampak negatif pada pertumbuhan ekonomi.

This study empirically examines the causality between government size and trade openness including economic growth as an intermittent variable from 1980 to 2018 in South Africa. The study employed the Johansen-Juselius cointegration and Granger causality test. The results revealed that there is a long-run relationship between government size and trade openness. The Granger causality test revealed that there is a unidirectional causality from trade openness to government size. Therefore, the study does find support for a compensation hypothesis in South Africa.

Generally Speaking, investment is the heart of economic growth and development. Financing investment, on the other hand, is one of the major economic challenges, and yet, this is a very crucial issue in developing countries. Investment is made in the form of domestic and foreign investment, and therefore foreign investment is affected by economic and political conditions. Therefore, in this study, the effect of democracy on direct foreign investment has been done among two selected groups of countries including those with high and those with low level of democracy from 2001 to 2015 using panel data method. The results showed that democracy has a significant and direct impact on FDI in countries with high and low democracy, while the effect of democracy on FDI in countries with low democracy is much greater than in countries with high democracy. Besides, fixed capital formation, economic growth rate, literacy rate, exchange rate, trade and government size have direct and significant effects on FDI in countries with low democracy. However, in countries with a high level of democracy, exchange rates and government size have a significant negative impact on foreign direct investment.

Research background: Although a number of studies have been conducted on the relationship between public expenditure and economic growth, it is difficult to tell with certainty whether or not an increase in public expenditure is good for economic growth. This lack of consensus on the results of the previous empirical findings makes this study of paramount importance as we take stock of the available empirical evidence from the 1980s to date. Purpose: In this paper, theoretical and empirical literature on the relationship between government expenditure and economic growth has been reviewed in detail. Focus was placed on the review of literature that assessed the impact of government spending on economic growth. Research Methodology: This study grouped studies on the impact of public expenditure on economic growth based on their results. Three groups emerged – positive impact, negative impact and no impact. This was followed by a review of each relevant study and an evaluation of which outcome was more prevalent among the existing studies on the subject. Results: The literature reviewed has shown that the impact of government spending on economic growth is not clear cut. It varies from positive to negative; with some studies even finding no impact. Although the impact of government spending on economic growth was found to be inconclusive, the scale tilts towards a positive impact. Novelty: The study provides an insight into the relationship between public expenditure and economic growth based on a comprehensive review of previous empirical evidence across various countries since the 1980s.

This study provides new insights into the growth-maximizing size of government. Unlike the previous literature, which traditionally uses a single measure, government expenditure as a share of GDP, to measure the size of government, in this study we use multiple measures to measure it. Considering each of these measures, we first attempt to uncover the potential nonlinear relationship between government size and growth, and we then estimate the thresholds of government size that maximize growth. To this end, we use an appropriate econometric specification, namely the threshold autoregressive (TAR) model proposed by Hansen [1996, 2000], and apply it to Turkey's annual time-series data covering a fairly broad period ranging from 1974 to 2019. Overall, we arrive at the following key result: the size of government is not linearly correlated with growth, confirming the existence of a growth-maximizing threshold for each measure of government size, beyond which growth tends to slow down as government size continues to increase. More specifically, the results show that the range of estimated growth-maximizing size of government is between 4.28% and 15.19%, depending on how government size is defined or measured. Policymakers can take these different thresholds into account when designing their policies.

“BARS curve” relates the size of Government (rounded by the share of public expenditure) to economic growth. This paper aims at analyzing the empirical evidence in a 13-EU Member State group, referring to the period 1970-2008, using both time-series techniques and panels. After a brief introduction, a critical survey of the economic literature about this subject is shown; then some specifications of “BARS curve” are estimated, arguing on results. Some concluding remarks about expenditure policies of EU Members conclude the paper., https://www.acri.it/wp-content/uploads/2021/02/Risparmio1_2010.pdf

Using time-series and panel data methodologies, the paper analyzes the existence and shape of the «BARS curve» (Barro, Armey, Rahn, and Scully) for EU countries in the period 1970-2009, connecting the size of Government (measured by the share of public expenditure on GDP) to the rate of economic growth. Individual countries research has been conducted for twelve EU countries for which enough data were available, while panel analysis has been performed both for EU-27 and for some sub-groups, distinguished by their different socio-economic and monetary structures, and per capita GDP. BARS curves were generally found, and the shares of actual public expenditures generally exceed substantially those related to the maximization of GDP growth. However, great differences emerge. For the 12 countries examined by time-series techniques, the difference between the actual level and the peak of the BARS curve ranges from 2.3 points for Ireland and 18.1 points for Belgium. Similar situations were found in the panel analysis, with a smaller gap for the Anglo-Saxon countries in comparison to the Western Continental countries. For low per capita GDP countries the peak is higher than for the mature economies. Moreover, we found a long-run relationship between real GDP and public expenditure for six countries, while Granger-causality tests suggest different flows of direction for each country. So, further research may prove useful to shed light on the disparities emerging in the empirical analysis of individual countries, as well as within panel sub-groups. Results in the paper highlight that European countries are very heterogeneous in terms of the peak of the BARS curve. This evidence leads to an interesting question, i.e. if the fiscal adjustment should be the same for all the states or it should depend on the weight of the public sector on GDP in each country.

I nostri risultati evidenziano la presenza di una relazione non lineare tra le dimensioni dell’operatore pubblico (misurate dalla quota di spesa pubblica sul PIL) e il tasso di crescita economica per l’Italia. In linea generale, a prescindere dai dati utilizzati [qui, quelli di Forte (2011), in altre analisi quelli della Commissione Europea] e dalle suddivisioni temporali proposte, comunque emerge la presenza di un andamento parabolico tra le variabili., http://www.strategicstudies.it/wp-content/uploads/2012/07/Policy-ROI_IL-TRADE.pdf

The effect of the government size on economic growth still keeps its unclear status despite the works in this field. According to the Armey Hypothesis 1995 , which one of the studies developed for the volume of government size in economy, the increase in the public volume in economy will increase economic growth up to a certain level, and when the maximum level is reached, the increase in public volume will cause decreases in economic growth. In this study, the issues of whether the Armey Hypothesis is valid or not for G7 countries has been investigated, and the optimum public volume has been determined for G7 countries. In testing Armey Curve hypothesis, we use ARDL cointegration procedure. The results of empirical findings argue that the Armey Hypothesis is valid for US, and Canada, and France when it is invalid for other G7 countries., Kamu büyüklüğünün ekonomik büyüme üzerindeki etkisi, literatür genelindeki çalışmalara rağmen belirsizliğini korumaktadır. Armey Hipotezi'ne 1995 göre, kamu hacmindeki artış, belli bir seviyeye kadar ekonomik büyümeyi pozitif olarak etkilerken belli bir maksimum düzeyenden sonra kamu hacmindeki artış ekonomik büyümede düşüşe neden olmaktadır. Bu çalışmada, Armey Hipotezinin G7 ülkeleri için geçerli olup olmadığı konusu araştırılmış ve G7 ülkeleri için optimum kamu hacmi belirlenmiştir. Armey Curve hipotezini test edilmesinde, ARDL eşbütünleşme modeli kullanılmıştır. Ampirik bulgulara göre, Armey Hipotezinin ABD, Kanada ve Fransa için geçerli iken diğer G7 ülkelerinde geçerli olmadığı tespit edilmiştir

Environmental sustainability is one of three pillars of sustainability. However, a significant worldwide deterioration in the environment has been experienced since the Industrial Revolution, but the efforts to protect the environment date back to the 1970s. In this context, many economic and non-economic factors underlying environmental degradation have been investigated until today, but the influence of economic freedom indicators and education on the environment have been relatively less analyzed and the researchers have mainly focused on the influence of economic and institutional variables on the environment. Therefore, this paper investigates the reciprocal interplay among economic freedom indicators, education, and environment in EU member states over the 2000–2018 term by using a causality test with cross-sectional dependency and heterogeneity and taking the research gap into consideration. The causality analysis indicates that market-oriented economic structure and education can be beneficial in combatting environmental degradation.

This study uses a large firm-level data set covering more than 80 countries to explore the effects of firm-size, city-size, and government-size on perceived and experienced corruption. Four points summarize our main findings, which seem instructive and new. First, there is a broad structural similarity in the major determinants of perceived and experienced corruption. Second, larger firms and larger government size lower corruption perceptions and experience. Third, larger cities raise corruption perceptions and experience. Fourth, when the sample is limited to large cities, the corruption-lowering effect of government size loses significance throughout, while firm size loses significance in experience regressions.

Group identity is known to exert a powerful socio-psychological influence on behaviour but to date has been largely explored as a uni-dimensional phenomenon. We consider the role of multiple dimensions of identity, asking what might happen to ingroup and outgroup perceptions and the resulting implications for cooperation. Carefully selecting two politically charged identity dimensions documented to have similar strength and to be largely orthogonal (religious belief and views about government size), we find that priming individuals to consider both dimensions rather than one has a noticeable effect on behaviour. Moving from one to two dimensions can produce a significant increase in ingroup allocations at the expense of fairness to outgroup individuals, although the effect varies as we switch from primarily considering religion to government size. Evidence suggests that the heterogeneity of such effects is related to the degree of "harmony" between groups in the dimensions concerned.

Recent studies suggest that firm profits have risen to a level far above than what would have been earned in a competitive economy. It has been hypothesized that these profits, generated by market power, allow firms to influence the activity of the government. However, despite an abundance of theoretical investigations, the empirical examinations for the validity of this hypothesis have been largely neglected. Against this background, here we perform a detailed empirical study on the potential effects of firm profits and markups on government size and effectiveness. Using data on 30 European countries for a period of 17 years and an Instrumental Variables approach, we find that there exists a robust and stable negative relationship between firm gains and the activity of the state. Our results indicate that, even in such a homogeneous group of countries, firm power may dictate the decline in state activity and, successively, lead to emergence and persistence of inefficient states.

This study examines the impact of rule of law and government size under the dimensions of economic freedom to the social and financial efficiency of microfinance institutions (MFIs) from Thailand, Philippines, Malaysia, Indonesia, and Cambodia 2011 to 2018. The Data Envelopment Analysis (DEA) approach has been applied to identify the efficiency level of MFIs. At the same time, the Pooled Ordinary Least Square (PoOLS) and Generalized Least Square (GeLS) methods comprising the Fixed Effect (FEMod) and Random Effect (REMod) models are used to examine the impact of dimensions of economic freedom and potential determinants on the efficiency level of MFIs. Overall, the results revealed that the technical efficiencies for both social and financial efficiency are contaminated by managerial inefficiency, which is measured by pure technical efficiency. This indicates, although the MFIs had been operating on a relatively optimal scale, they were facing the inefficiency from the managerial side. Besides, the results from the panel regression analysis have implied that both property rights and government integrity under the measurement of rule of law positively influence the MFIs’ financial efficiency. Meanwhile, the impact of government size shows both tax burden and government spending are significantly positive to the social efficiency of MFIs. As the policy implication, the information provides suggestion to the government on how its role can help in improving the efficiency level of MFIs and implements some useful initiatives to help MFIs to sustain in the long term. In addition to that policymakers can identify the relevant inputs of MFIs and thus revise the policy accordingly and design new policies and regulations based on different economic freedom dimensions. The results of the present study provide a reference to guide them in decision making on their investments. For academicians or researchers, they can obtain more information regarding the efficiency of MFIs that is valuable for further research or study.

Establishing an international financial center appears to be an important goal of many governments in emerging markets in Asia to support national economic growth. The establishment of such a center requires a multifaceted approach in which theoretical and practical aspects are important to consider. This study is conducted to examine and identify the necessary conditions leading to the establishment of a center in the Asian region. We identify 14 determinants in the current literature. We then construct 16,384 models to consider the relevance and importance of each of these 14 determinants in the context of the Asian region. The Bayesian averaging of classical estimates (BACE) is used with a sample of 35 Asian countries in this paper. Findings from our paper indicate that emerging and developing countries in the Asian region should focus on the following fundamental determinants: freedom to trade internationally, market size, higher education and training, and the size of the government. Policy implications are offered based on our findings.

İşsizlik hem gelişmekte olan ülkeler hem de gelişmiş ülkeler için en önemli makroekonomik sorunlardan biridir. Türkiye de yıllar içinde işsizlik ve genç işsizliği ile mücadele etmek zorunda kalmıştır. İşsizlik bugüne kadar pek çok sebeple ilişkilendirilmiştir. Bunlardan birisi de ilk kez Abrams (1999) tarafından ortaya atılan kamu büyüklüğü ile işsizlik arasındaki direkt ilişkidir. Bu çalışma, kamu büyüklüğünün işsizliği artırdığını gösteren Abrams eğrisinin Türkiye'de işsizlik ve genç işsizliği açısından varlığını araştırmayı amaçlamaktadır. Bu amaçla işsizlik ve genç işsizliği için dörder farklı model oluşturulmuş ve 1994-2018 yılları baz alınarak modellere ARDL sınır testi yaklaşımı ve Granger nedensellik analizi uygulanmıştır. Ampirik sonuçlara göre hem işsizlik hem genç işsizliği için Abrams eğrisinin geçerliliğini doğrulayan sonuçlara ulaşılmıştır. Bunun yanında, nedensellik test sonuçları ise, kamu büyüklüğünden işsizliğe doğru tek yönlü nedensellik ilişkisinin varlığını göstermektedir. Genç işsizliğinde ise genç işsizliği ve kamu büyüklüğü arasında herhangi bir nedensellik bulunamamıştır.Anahtar Kelimeler: İşsizlik, Genç İşsizliği, Kamu Büyüklüğü, Abrams Eğrisi, ARDL Yaklaşımı, Granger Nedensellik Analizi. Unemployment is one of the most important macroeconomic problems for both developing and developed countries. Turkey also has been obliged to contend with unemployment and youth unemployment over the years. Unemployment has been associated with many reasons. One of these is the direct relationship between government size and unemployment, first proposed by Abrams (1999). This study purposes to investigate the validity of Abrams curve in terms of both unemployment and youth unemployment for Turkey to show larger government size increases unemployment. For this purpose, four different models were formed for unemployment and youth unemployment and ARDL bounds test approach and Granger causality analysis were applied to the models over the period of 1994-2018. According to the empirical results, conclusions that confirm the validity of the Abrams curve for both unemployment and youth unemployment were reached. Furthermore, the Granger causality test results show that there is a one-way causal relationship from government size to unemployment. For youth unemployment, any causality between youth unemployment and government size was not found.Keywords: Unemployment, Youth Unemployment, Government Size, Abrams Curve, ARDL Approach, Granger Causality. 97

Populous communities often prefer more government involvement than less populous communities, but does community size per se affect citizens' preferences for government? Endogeneity commonly prevents testing for causal effects because (i) people can select into communities while (ii) government structures can affect community size (e.g., by en- or discouraging migration and fertility decisions). This paper studies a plausibly exogenous setting from post-WWII Baden-Württemberg (located in Southern Germany), in which the French occupation zone prevented the entry of German expellees after 1945, whereas the U.S. occupied zone did not. Consequently, municipalities on the U.S. side, just across the border from the French zone, experienced large and relatively homogenous population shocks. Studying voting patterns in the 1949 national- and 1952 state-level elections for 828 municipalities, we find more populous municipalities systematically preferred the SPD (Sozialdemokratische Partei Deutschlands), the party advocating for greater government involvement in virtually all areas of policymaking, over the CDU (Christlich Demokratische Union), the major conservative party that emphasized free markets. Our results hold when accounting for a host of potential confounding factors, county-fixed effects, pre-WWII vote shares, employing fractional response models and alternative instrumental variable specifications. Our benchmark estimates imply that a one standard deviation increase in population size (equivalent to ≈4,000 citizens) raised the SPD vote share by more than 11 percentage points.

Bu çalışmanın ilk versiyonu, 26-28 Nisan 2018 tarihlerinde Nevşehir’de düzenlenen “4th SCF International Conference on Economic and Social Impacts of Globalization” de özet bildiri olarak sunulmuştur., Bu çalışmada, Türkiye’de 26 Kalkınma Bölgesi dikkate alınarak kamu harcamaları ve işsizlik düzeyi arasındaki ilişki panel ARDL yöntemiyle 2004-2018 dönemi yıllık verileri ile incelenmiştir. Değişkenler arasındaki uzun dönemli ilişkinin incelenebilmesi için birim kök testleri ile durağanlık sınaması yapılmış, sonrasında ise uzun dönemli ilişkinin varlığı panel eşbütünleşme testleri ile saptanmıştır. Uzun ve kısa dönem katsayıların tahmini Panel ARDL metoduna dayalı Havuzlanmış Ortalama Grup Tahmincisi (PMGE) ile gerçekleştirilmiştir. Panel ARDL-PMGE sonuçları, uzun dönemde kamu harcamalarındaki %1’lik artışın işsizlik oranını %0,043 oranında azalttığını, kısa dönemde ise kamu harcamalarındaki %1’lik artışın işsizlik oranını %0,75 düzeyinde artırdığını ortaya koymaktadır. Araştırmanın bulguları, Türkiye’de bölgesel düzeyde kısa dönemde Abrams Eğrisi Hipotezi’nin, uzun dönemde ise Keynesyen Yaklaşım’ın geçerli olduğunu göstermektedir., In this study, the relationship between regional unemployment rate and public expenditures in Turkey has been investigated by panel autoregressive distributed lag (ARDL) method. The panel data consists of 26 Development Regions of Turkey for the period 2004-2018. In order to analyse the long-run relationship between variables, stationary is tested by panel unit tests, then cointegration is estimated. According to the results of Panel ARDL-PMGE, 1% increase in public expenditures reduced the regional unemployment by 0,043% in the long run. On the contrary, 1% increase in public expenditures increased the regional unemployment by 0,043% in the short run. The result of this study show that Abrams curve hypothesis is valid in the short run, while the Keynesian approach is valid in the long run.

Bu tez çalışmasıyla amaçlanan iktisat/maliye literatürünün teoride ve pratikte eskiden beri en tartışmalı konularından biri olan kamu kesimi büyüklüğü - ekonomik büyüme ilişkisinin incelenmesi ve Türkiye için çeşitli kamu kesimi büyüklüğü göstergeleri bazında 1974-2016 dönemi için optimal kamu kesimi büyüklüğü tahmininin yapılmasıdır. Bu doğrultuda çalışmada ARDL sınır testi modelinden faydalanılarak öncelikle ekonomik büyüme ve kamu kesimi büyüklüğü arasındaki ilişkinin `ters U` şeklinde olup olmadığı test edilmekte ve daha sonra optimal kamu kesimi büyüklüğü oranları hesaplanmaktadır. Tezin ampirik bulguları, Türkiye'de kamu kesimi büyüklüğü ile ekonomik büyüme arasında uzun dönemli bir `ters U` ilişkisinin varlığına dair güçlü ve sağlam kanıtlar sunarak BARS eğrisinin geçerliliğini teyit etmektedir. Ayrıca, tezin ampirik sonuçları, merkezi yönetim bütçe harcamaları ve savunma harcamaları hariç tüm göstergelerin incelenen dönem için optimal kamu kesimi büyüklüğü oranının üstünde olduğunu ortaya koymaktadır. Bu nedenle bu iki kamu kesimi büyüklüğü göstergesi dışındaki kamu kesimi büyüklüğü göstergelerinde optimal orana kadar yapılacak bir azalışın ekonomik büyüme oranını artırması beklenmektedir.Anahtar Kelimeler: ARDL sınır testi, Ekonomik Büyüme, Kamu Kesimi Büyüklüğü, Türkiye The aim of this thesis is to examine the relationship between government size and economic growth, which has been one of the most controversial issues in both theory and practice in economics/public finance literature. Our main objective is to test whether the inverted U-shaped relationship between the government size and economic growth is valid for Turkey for the period 1974-2016 by using various proxy measures for government size. In the thesis, using the ARDL bound test model, firstly the relationship between government size and economic growth is tested whether there exist inversed U-shaped and then optimal government size ratios are calculated. Empirical findings of the thesis provide strong and robust evidence for the existence of an inversed U-shaped long-run relationship between government size and economic growth, confirming the validity of the BARS curve. Additionally, the empirical results of the thesis revealed that all proxy measures for government size except the total central government budget expenditures and defense expenditures, are above the rate of optimal government size for the period examined. Therefore, it is expected that a decrease in the government size except these two indicators would increase the economic growth.Keywords: ARDL bound test, Economic Growth, Government Size, Turkey 239

Due to the importance of the government size impact on economic growth, the current study investigates the impact of government size on economic growth in economies of the developed and developing countries by using a panel data approach over the period 1990-2010. The results indicate that government size has positive effect on economic growth and negative effect on per capita production growth in developed countries, but, it has negative and significant effect on economic growth and per capita production growth in developing countries. Therefore, reducing the government size is very important for increasing the economic growth in developing countries such as Iran. Also, based on the results, investment growth and consumption expenditure growth have positive and significant effect on economic growth and per capita production growth in both developed and developing countries. However, Trade openness effect on economic growth and per capita production growth is positive and significant in developed countries, but is negative in developing countries.

This paper empirically revisits the validity of Wagner’s proposition in a panel of 149 developing countries between 1980-2015 by focusing on different components of government expenditure. We rely on an ARDL approach which allow us to uncover short and long-run cyclicality coefficients. Our results do not overwhelmingly support the existence of higher than unity long-run elasticities of government spending components vis-a-vis economic growth, suggesting that the Wagner’s regularity is more the exception than the norm. Moreover, the case for voracity is fading away as developing countries catch-up the development ladder and graduate from procyclicality. In fact, most short-run elasticities are countercyclical. Finally, some macroeconomic and institutional and political characteristics affect the degree of government spending cyclicality. info:eu-repo/semantics/publishedVersion

Introduction: The national trend indicates that various provinces of Iran have experienced in attaining economic growth exclusive of parallel observing a boost in CO2 emissions. It is clear that the effects of CO2 emissions on health indicators such as death rate, infant mortality, and health expenditures have been ignored by policy makers over the last decade. Methods: This study for the first time in previous literature in Iran, utilizes 1989-2016 panel data of the three economic sectors (agriculture, industry and services) of Iran to examine the effect of financial development on CO2 emissions using Pooled Mean Group (PMG) and Mean Group (MG) Regression techniques. The potential impact of government size and capital stock on CO2 emissions is also analysed. Results: According to empirical results, in the long-run, government size and capital stock increase CO2 emissions, while financial development compact it. However, the results show these variables don’t have statistically significant effect on CO2 emissions in short-run. Conclusion: The study opens up new policy insights to control the Environment from degradation by financial development on economic sectors. It recommends that policy makers should realize the potentiality of the financial development in minimizing the CO2 emissions. Therefore, the policy makers need to facilitate more financing at lower costs for investment in environmental projects.

Bu çalışmanın amacı ülkeler arasındaki devletin boyutundaki faklılıkları ortaya koyacak çeşitli politik, ekonomik ve demografik faktörleri belirlemektir. Çalışmada, Dünya Bankası’nın veri tabanında bulunan 81 ülkenin 1990-2015 dönemi yıllık verileri kullanılarak söz konusu değişkenler ile devletin ekonomik hacmi arasındaki ilişki panel veri analiz yöntemi ile test edilmiştir. Devletin boyutunu ölçmede devletin nihai tüketim harcamalarının gayri safi yurt içi hasılaya oranı ölçüm birimi olarak kullanılmıştır. Başlıca bulgularımız şunlardır. Politik kutuplaşma (political polarizaiton), gelir eşitsizliği, nüfus yoğunluğu, kişibaşı gayri safi yurtiçi hasıla büyümesi, ülkenin federal bir yapıda olması ile devletin boyutu arasında anlamlı ve negatif bir ilişki, demokrasi, siyasi ayrışma (fractionalizaiton) ve dini ayrışma (religious fractionalizaiton) ile devletin boyutu arasında ise anlamlı ve pozitif bir ilişki vardır.

Real exchange rate deviations should be consistent with behavior of fundamental indicators including terms of trade, openness, government size, the ratio of domestic to trading partners’ productivity, and net foreign direct investment. The aim of this paper is to study the response of exchange rate to structural variables and its consistency with economics theory.Our estimation of a vector auto regression (VAR) model which relied on seasonal data during 1990-2015 underscores that real exchange rate (RER) is significantly depreciated with regard to the long run trend, while simultaneously and in contrast with theoretical basis, non-oil trade deficit widened, government size increased, and terms of trade improved due to higher international oil price. The accelerating gap between actual and long run trend of RER augments the unsustainability of balance of payments and foreign exchange market vulnerability against probable shocks. Foreign exchange forward market is constructed in practice to monitor demand composition in general and the share of speculative transaction in particular to increase information capacity of policy-makers to achieve the goal of financial stability and external sustainability in one hand as well as evaluating the Central Bank intervention capability on the other hand.

This paper explores the determinants of public employment across the world and finds that it is negatively associated with country size (by population) and positively associated with the income level. The findings show that a country's openness to trade is positively associated with public employment in low- and middle-income countries, but inversely related in high-income countries. The estimated models are used to predict the expected public employment for a country given its income, population, and openness to trade, and to compare the actual levels with the predicted ones. In general, public employment in Latin American countries is below the predicted levels, except for Argentina, Brazil, Ecuador, Mexico, Suriname, Trinidad and Tobago, and the República Bolivariana de Venezuela. Public employment in the Middle East and North Africa is above the predicted levels, particularly in the Arab Republic of Egypt and the Islamic Republic of Iran. East Asian and Pacific countries' public employment is significantly below the predicted levels, particularly in Hong Kong SAR, China; Japan; the Republic of Korea; and Mongolia. Countries in Europe and Central Asia show higher than predicted public employment, mostly in Romania, Denmark, Sweden, Armenia, and Belorussia. Public employment in Sub-Saharan Africa appears to be below the predicted levels, with the notable exceptions of Botswana and South Africa. The deviations from predicted levels are positively correlated with the union density rate, which is negatively associated with private employment rates. Finally, the study finds no statistical association between public and private employment, suggesting the absence of crowding-out in the employment levels.

We assess how “big” government should reasonably be in a number of advanced countries. First, we will link the recent findings of Data Envelope Analysis on efficient public expenditure with the question of the size of the government. Second, we report descriptive analysis of various government performance indicators in relation to public expenditure to provide indications of overall “optimal” across spending categories. In principle, the highest savings potential is in the biggest expenditure categories, public consumption and social expenditure. info:eu-repo/semantics/publishedVersion

We examine the effect of population size on government size for a panel of 130 countries for the period between 1970 and 2014. We show that previous analyses of the nexus between population size and government size were incorrectly specified, not accounting for cross-sectional dependence, non-stationarity and cointegration as well as parameter heterogeneity. Using a panel time-series approach that adequately models these issues, we find that population size has a positive long-run effect on government size. This finding suggests that the detrimental effects of population size on government size (primarily due to a greater risk of social conflict) dominate its beneficial ones (primarily due to scale economies). We also show that population size increases government size especially in countries that are vulnerable to social conflict due to ethnic heterogeneity.

The purpose of this article is to explore the impact of tax revenue as a share of GDP on economic growth in transition economies. The article uses a dynamic panel threshold model to examine the nonlinear relationship between tax revenue and economic growth of 11 central and south-eastern European and Baltic countries during the transition process between 1995 and 2014. The results suggest that the optimal level of tax revenue for maximising economic growth is approximately 18.00% of GDP for full transition economies, 18.50% for developing economies and 23.00% for developed economies. The findings indicate that tax revenues as a share of GDP above the threshold level adversely affect economic growth whereas a tax revenue rate below the threshold positively affects growth. The results of the current study reveal that tax sizes representing the share of the government in the economy have an optimal level. © 2019 Inderscience Enterprises Ltd.

Expansion of the public sector and redistributive policies may reduce income inequality, but formal tests suffer from the problem of endogeneity of government size with respect to the distribution of income. Studying 30 European countries over the period 2004-2015, we apply instrumental variable estimation techniques to identify a causal relationship between income inequality and government size, measured as the government expenditure share in GDP. Using a novel instrument – the number of political parties in the ruling coalition – we find that accounting for the possible endogeneity of government size increases the magnitude of the estimated negative effects. Our findings thus suggest that much of the literature underestimates the true role of the government in attenuating income inequality. The estimated relationship between income inequality and government size persists in a series of robustness checks.

We examine the effect of population size on government size for a panel of 130 countries for the period between 1970 and 2014. We show that previous analyses of the nexus between population size and government size were incorrectly specified, not accounting for cross-sectional dependence, non-stationarity and cointegration as well as parameter heterogeneity. Using a panel time-series approach that adequately models these issues, we find that population size has a positive long-run effect on government size. This finding suggests that the detrimental effects of population size on government size (primarily due to a greater risk of social conflict) dominate its beneficial ones (primarily due to scale economies). We also show that population size increases government size especially in countries that are vulnerable to social conflict due to ethnic heterogeneity.

Does trade openness systematically imply bigger governments, as proposed by Rodrik (1998)? This paper presents a novel and more refined explanation for when and why international trade may enlarge the public sector. We propose that trade openness is associated with bigger governments if (i) the price volatility of a country’s export basket is substantial and (ii) the country is democratic. The first condition satisfies the prior that open trade barriers indeed introduce uncertainty and external risk – something that is not necessarily the case for all trade. The second condition ensures that the people’s desire for greater economic security can be realized through government spending. Empirical evidence for 143 countries (accounting for approximately 96 percent of world population) from 2000-2016 is consistent with this hypothesis. Exploring areas of public spending, we find intuitive patterns: Consistent with the compensation hypothesis, government spending on economic affairs and housing increases significantly with trade openness, whereas public spending on education, health care, and the military are not immediately concerned. As with our general result, this is only the case in democracies that are subject to high price volatility on the global market.

The aim of this paper is two-fold; first, it studies the impact of the credibility of fiscal rule policy on the stability of output growth; second, it compares the effectiveness of fiscal rule policy to discretionary and automatic stabilizer fiscal policies to address the fluctuation of output growth. Employing quarterly data over the period 2001-2013 in the case of Indonesia, we obtain that the credible debt rule leads to a decrease in the volatility of output growth while the non-credible deficit rule does not have any effect. Both unsystematic and systematic components of discretionary fiscal policy have a stabilizing function. Interestingly, the automatic stabilization tends to induce the volatility of output growth. Given those results, we infer that government spending is not a good automatic stabilizer. It seems that the lower ratio of government expenditure to GDP along with improving credibility of deficit rule policy has a smoother effect on the economy. Therefore, they implicitly support expenditure cuts when implementing fiscal adjustment with the purpose of reaching fiscal sustainability in the short-run and a stable economic growth in the long-run.

Purpose – The purpose of this article is to examine the interconnected relationships between government size, country size, openness and economic growth. In fact, more trade openness increases government size, which lays stabilizer role against external shocks and GDP volatility. More country size leads to lower government share to GDP from one side and less openness from other side, where as per capita expenditure on public goods is lower, and large markets enjoy more productivity and less incentives for large market to increase openness than the small markets. Finally, economic growth and government have a negative relationship if government size exceeds the optimal size. Design/methodology/approach - We employ three models, which two of them are using 2SLS technique and the third model is using GMM system analysis to examine these relationships in eight selected MENA countries. Our panel data is for the period from 1977-2013 sourced from the World Development Indicators of the World Bank. Findings - Results prove literature proposed hypotheses for the selected region and period, and show that government share to GDP exceeds the optimal size. Moreover, more growth can be realized through more integration in the world economy. Research limitations/implications – Data limitation led to the inclusion of only eight countries of MENA region. We recommend to convert government expenditure to investment and infrastructure instead of social transfer and current expenditure. Furthermore, more studies could be done about the government expenditure structure. In addition, we recommend to minimize government intervention to the market. Finally, growth of government does not improve investment environment or reduce transactions costs, and it crowds out private sector. Originality/value – This is the first work in MENA region, and using recent econometric techniques in subject according to our knowledge.

Capital flows are key variables supporting the sustainability of economic growth. Based on a dataset of 31 provinces in China over 1997&ndash, 2014, this paper utilizes the system generalized method of moments (System GMM) to investigate the determinants of capital flows and analyses the impact of government size on capital flows. Preliminary results show that government size exerts a negative effect on capital inflows. Specifically, government spending on capital construction and administration crowds out capital inflows significantly, while government spending on science and technology crowds in capital inflows dramatically. In addition, high quality human capital, advanced financial development, and high-level trade openness are conducive to capital inflows. High tax and labor cost impede capital inflows. These results provide proof for China&rsquo, s government to reduce the size of government spending appropriately and optimize its government expenditure structure for the purpose of crowding in capital inflows.

We assess how “big” government should reasonably be in a number of advanced countries. First, we will link the recent findings of Data Envelope Analysis on efficient public expenditure with the question of the size of the government. Second, we report descriptive analysis of various government performance indicators in relation to public expenditure to provide indications of overall “optimal” spending across spending categories. In principle, the highest savings potential is in the biggest expenditure categories, public consumption and social expenditure. info:eu-repo/semantics/publishedVersion