Government size and economic growth in developing countries: a political-economy framework

Many authors have examined the impact of growth in government size on economic growth. These studies, however, have not distinguished the impact among political and economic sys-tems. This paper presents a model that differentiates the effects of government on economic growth across political and economic systems in developing countries. The results show that growth in government size has negative effects on economic growth, but the negative effects are three times as great in nondemocratic socialist systems as in democratic market systems. 1