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The purpose of this paper is to examine the impact of the size of government and public debt on real economic growth, for a panel of 175 countries around the world.

The paper utilizes the fixed‐effects and random‐effects techniques to estimate the panel regressions.

The results indicate that both the size of government and the extent of government indebtedness have negative effects on economic growth.

The findings suggest that the authorities ought to take the necessary steps to curtail excessive government spending and public debts, in order to promote economic growth.

The contribution of the paper is its application of the fixed‐ and random‐effects techniques in modeling the relation of real economic growth to the size of government and public debt, for a panel of 175 countries around the world.

Standard economic theory predicts that any increase in public spending is accompanied by a rise in inflation in an economy. This paper presents empirical proof that prices do not always rise with an increase in public expenditure but only up to a certain threshold level. The primary aim of this paper is to unearth the government size-inflation nexus in India for the period from 1971 to 2019.

The logistic STAR (smooth transition autoregression) model is employed to unravel the government size-inflation nexus for the Indian economy from a non-linear perspective.

The finding of our study confirm the non-linear relationship between the size of the government and inflation in India. The estimated threshold level for government size is precisely found to be 9.27%. The size of the government exerts a negative influence on inflation until it reaches the optimal or threshold level. Any further increase in the size of government beyond this threshold level would result in a rise in inflation.

The findings have implications for the conduct of fiscal policy. Policymakers can increase government spending in a regime of small government size without having any inflationary impacts by generating revenues from taxes and other sources instead of relying much on the central bank. In the regime of a large-sized government, adhering strictly to the discipline in the conduct of fiscal and monetary policies would help curb inflation and enhance growth synchronously, hence alleviating any loss of welfare.

To the best of the authors’ knowledge, this study is an attempt to revisit the government size-inflation nexus in India from a non-linear perspective using the Smooth Transition Autoregression (STAR) model for the first time.

Most African countries operate large government sizes but with little corresponding economic outcomes. Institutional economics however, show that strong institution is fundamental in promoting economic growth. This study examines the linkages between government size, institutional quality and economic welfare in Africa.

This study deploys the System Generalized Method of Moments estimation strategy on panel data of 52 African economies from 2000–2018.

The result shows that government size has a negative impact on economic welfare, while institutional quality has a positive impact on economic welfare. The interaction of government size and institutional quality shows a positive impact on economic welfare, signifying synergy and complementarity. Thus, strong institutions counteract the adverse effects of large government size on economic welfare.

To promote human development and economic welfare, and attain key Sustainable Development Goals such as good health and well-being, quality education, decent work and economic growth, African policy makers need to keep their government sizes at optimal levels and promote strong institutions.

This paper provides first-hand empirical evidence of the relevance of institutional quality in counteracting the adverse influence of large government size in Africa. It determines the thresholds of government size and uses a composite index as proxy for same. In addition, this study uses the World Governance Indicators and the Fraser Institute Economic Freedom Index as alternative measures of institutional quality and Gross Domestic Product per capita and Human Development Index as proxies for economic welfare.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-01-2024-0075

The purpose of this paper is research the relationship between size of government and FDI inflows of the host country, and provide a strategies.

Adopting the fixed effect model of panel data, this paper uses related observations from 81 countries between 2002 and 2006 to analyze the impacts of government size (measured by score of government size) on FDI inflows.

The results show that the enlargement of government size has a positive effect on FDI inflows, and the effect is much more significant in developing countries.

There is no previous research concerning the impacts of size of government on FDI inflows. Through the investigation, the paper finds the relation between government size and FDI inflows and provides much valuable information.

Africa and Asia are the two most populous continents in the world and are projected to increase further in the near future and this puts the governments under great stress in terms of increased public expenditure and dealing with a low revenue generation. Thus, the purpose of this study is to assess the influence of population age structure on the size of government expenditure in Africa and Asia covering the period 1990–2018.

The study employed panel fully modified ordinary least squares (FMOLS) estimation in estimating the relevant relationship between the variables in the model.

The key findings revealed that the major population age structures that influence the size of government expenditure in Africa are population aged 0–14 years and population aged 15–64 years, while that of Asia are population aged 15–64 years and population aged 65 years and above. The findings provided strong support for the Population Reference Bureau report (2019) that countries in Africa are home to some of the world's youngest population, that is, those aged 15 years or below, while Asia is home to some of the world's oldest population, that is, those aged 65 years and above.

While generalized method of moments (GMM) estimation is beneficial in the presence of endogeneity, it is only designed for situations with a small time period (T) and a large number of cross sections (N). Hence, the estimation technique was limited only to FMOLS as the number of the cross sections or countries which is ten for Africa and ten for Asia is lower than the time period which is 29 years (1990–2018).

Empirical literature investigating the influence of population age structure on the size of government expenditure has focussed mainly on one aspect of the population age structure and government expenditure, which is the influence of ageing population on government expenditure on health. Hence, this study focussed on assessing the influence of population age structure on the size of government expenditure. The study is unique as it compared the two most populous continents in the world, which are Africa and Asia to determine which of the population age structures have the most significant influence on the size of government expenditure.

In general, there are many disincentives standing in the way of promoting change in public procurement practices by government agencies. Because engaging in sustainable purchasing requires some level of entrepreneurialism and risk-taking, a sorting framework is adopted to gauge whether some organizations are systematically more likely to pursue sustainable public purchasing (SPP) efforts than others. One-way analysis of variance and other methods are applied to a survey of public procurement practitioners across over 300 governments in the U.S. Results strongly suggest that agencies of various scope and reach tend to abstain from aggressively pursuing SPP efforts. However, when they do employ SPP, these efforts tend to be quite variable across and within levels of government and organizational size. In an effort to bridge theory with empirical data, a strong case can be made that the current state of SPP in the United States is the result of random and very cautious experimentation with little systematic pattern to SPP adoption.

This study quantitatively examines the relationship between economic fluctuations and government budget size in the context of China’s fiscal decentralization, drawing inspiration from theoretical predictions of the Keynesian view and empirical studies on other economies.

The panel comprises 31 provinces or equivalents in mainland China, spanning from 1994 to 2019. Diverse estimation strategies including two-way fixed effect regression, the generalized method of moments (GMM) and threshold regressions are, utilized.

The results suggest that under the “tax-assignment system”, neither the central government’s fiscal transfers nor the provincial budgetary revenues or expenditures help reduce economic volatility. Surprisingly, some regression outcomes suggest that government size measures destabilize business cycles.

While the study does not provide supportive evidence for the stabilizing effect of public budgets in Chinese provinces, it promotes a rethinking of the government’s intricate role in macroeconomic stabilization in the context of China’s fiscal decentralization.

In the literature on the effects of economic globalization, the compensation hypothesis suggests that there is a positive link between government size and external risk as governments perform a risk mitigating role to insure against productivity shocks through transfers. In contrast, the conventional wisdom hypothesis states that more openness will lower tax rates and lead to smaller government due to increased international factor mobility which undermines the ability of governments to tax. The purpose of this paper is to test the literature and present the authors' conclusions.

Using time series data for the USA, Canada, Japan and Australia over the period 1960‐2008, the authors test the asymmetric relationship between government size and terms‐of‐trade volatility by applying multivariate hidden cointegration analysis.

The findings show that high terms of trade volatility are positively related to government spending in the all sample countries. The effect is stronger in the case of positive movements than negative ones.

The policy implication is that the size of the public sector might play a risk‐reducing role in economies with significant amounts of external risk. In particular, public expenditure is considered to be an important fiscal policy instrument when terms of trade volatility are high.

The paper describes the first study of its kind.

This study is aimed at testing the validity of the BARS theory and determining the threshold level at which excessive government expenditure hampers growth. The data from 10 African emerging economies from 1988 to 2019 were used.

The methodology comprises several different stages. In the first stage, an Lagrange Multiplier (LM) type test was employed to find the appropriate transition variable among all the candidate variables to assess the linearity between government expenditure and economic growth and to find the sequence for selecting the order m of the transition function. The linearity test helped to identify the nature of the relationships between government expenditure and economic growth. In the second stage, the model evaluation was tested using the wild cluster bootstrap-Lagrange Multiplier (WCL-LM) test to assess appropriateness of the model. Thirdly, the Panel smooth transition regression (PSTR) model with one regime was estimated to test the validity of the BARS curve.

The results revealed evidence of nonlinear effects between government expenditure and economic growth, where the size of the government spending was found to be a 27.84% share of GDP, above which government expenditure caused growth to decline in African emerging economies. The findings combined into an inverted U-shape relationship, in line with the BARS theory.

This study proposes that policy-makers ought to formulate prudent fiscal policies that encourage expenditure, which would improve growth for selected countries as their current level of spending is below the threshold. This might be done through: (1) a suitable investment portfolio and (2) spending more on infrastructure.

The relative size of the State in industrialized economies has increased dramatically during the past century giving rise to legitimate fears that such a trend might end up having an adverse impact on growth. This chapter explores the relationship between the development of government activities and economic growth. It starts by evoking problems related to the measurement of the public sector before reviewing statistical evidence on the long-term growth of the share of the State in the economy. It then provides a number of explanations for this phenomenon including those pertaining to the functioning of the political system itself thereby pointing toward inefficiencies. The next step is to explore the principal avenues along which government interventions can positively or negatively interfere with the growth potential of the economy. It turns out that while public expenditures – especially those responding to market failures – tend to be favorable to growth, most taxes are growth-hindering. The final part of the chapter singles out some pitfalls in the empirical investigation of this relationship. The conjecture is that the nonlinear and possibly endogenous nature of the hypothesized nexus can explain the lack of consensus in empirical studies conducted so far.