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Optimal government size and economic growth in France (1871-2008) : An explanation by the State and market failures

François Facchini 1, Mickaël Melki 1

(2011-12)

This paper analyses the effect of public expenditure on economic growth from both a theoretical and an empirical point of view. Given that the economic literature supplies numerous and conflicting views on the topic, the article offers a framework combining both theories of market failures and State failures to account for an inverted U-shapped relation between government size and GDP growth. The empirical contribution is to provide evidence through a long time-series analysis of the existence of such a relation on the period 1871-2008 for France, which offers one of the longest stable democratic periods to analyse.

1:	Centre d'économie de la Sorbonne (CES)
	CNRS : UMR8174 – Université Paris I - Panthéon-Sorbonne

Research team: Axe Institutions

Subject

:

Humanities and Social Sciences/Economy and finances

Keyword(s): Public spending – public expenditure – government size – BARS curve – Armey curve – economic growth – market failure – State failure – France.

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From: Lucie Label <>

Submitted on: Wednesday, 21 December 2011 16:51:33

Updated on: Monday, 2 January 2012 13:26:16