Economic performance, government size, and institutional quality

António Afonso, João Tovar Jalles

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)

Abstract

This paper studies the empirical link between government size, institutions and economic activity using a panel of 140 countries over 40 years. Our results, robust under different econometric techniques, show mostly a negative effect of government size on output, while institutional quality has generally a positive impact. Moreover, the detrimental effect of government size on economic activity is stronger the lower institutional quality, and the positive effect of institutional quality on output increases with smaller government sizes.

Original languageEnglish
Pages (from-to)83-109
Number of pages27
JournalEmpirica
Volume43
Issue number1
DOIs
Publication statusPublished - 1 Feb 2016

Keywords

  • Common correlated effects
  • Globalization
  • GMM
  • Institutions
  • Pooled mean group
  • Production function

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