An essay on optimal size of government: a case study of Pakistan
Keywords:
Government, Pakistan, development, budget, expenditure.
Abstract
Pakistan is a developing country and faces the problem of the fiscal deficit since government expenditures are higher than revenues. In this situation the government has to raise loans to cover this deficit and the burden of loans and debt service is increasing significantly. Additionally, most of the budget has gone to service the debt. Under these circumstances, this study is an attempt to find the optimal size of the government and compare it with the actual size of the government. To calculate the optimal threshold level of government spending, the methodology used by Heerden (2008) for Pakistan is adopted. Finally, this study provides a guide for policymakers, either to reduce or increase the size of governme.
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References
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Barro, R. J. (1990). Government Spending in a Simple Model of Endogenous Growth. Journal of Political Economy, 98, 103-S125.
Barro, R. J. (1991). Economic growth in a Cross Section of Countries. Quarterly Journal of Economics. 106 (2), 407–443.
Dickey, D. A., & Fuller, W. A. (1979). Distribution of the Estimators for Autoregressive Time Series Regressions with a Unit Root. Journal of the American Statistical Association, 74, 427-431.
Friedman, M. (1997). If only the U.S. were as free as Hong Kong. Wall Street Journal, 8, 14.
Facchini, F., & Melki, M. (2011). Growth and Political Ideology in a Democracy: the French experience 1871 – 2009” EPCS, Rennes, France, 28th-1st May.
Heerden, V. (2008). Finding the Optimal level of Taxes in South Africa: A Balanced Budget Approach. Department of Economics, Working Paper.
Hearth, S. (2010). The Size of the Government and Economic Growth. An Empirical Study of Sri Lanka, working paper (published).
Husnain, M. I., (2011). Is the Size of Government Optimal in Pakistan: A Time Series Analysis, 1975-2008. Journal of Economics & Economic Education Research, 12 (2).
IMF (2005), International Financial Statistics, International Monetary Fund.
Karagianni, S. (2009). Evidence for Non-Linear Causality between Public Spending and Income in the European Union Countries. The Journal of Applied Business Research, 25 (1).
Mavrov, H. (2007). The size of government expenditure and the rate of economic growth in Bulgaria. Economic Alternatives, 1, 52-63.
Scully, G. (2008). Optimal Taxation, Economic Growth and Income Inequality in the United States. National Center for Policy Analysis, Policy Report No. 316.
State Bank of Pakistan. (2010). Handbook of Statistics on Pakistan Economy, State Bank of Pakistan
Tanzi, V. (2006). Corruption, Governmental Activities, and Markets. IMF Working Paper No.94/99.
Vedder, R., & L. Gallaway. (1998). Government size and economic growth. Joint Economic Committee, Washington, D.C. 5.
Barro, R. J. (1990). Government Spending in a Simple Model of Endogenous Growth. Journal of Political Economy, 98, 103-S125.
Barro, R. J. (1991). Economic growth in a Cross Section of Countries. Quarterly Journal of Economics. 106 (2), 407–443.
Dickey, D. A., & Fuller, W. A. (1979). Distribution of the Estimators for Autoregressive Time Series Regressions with a Unit Root. Journal of the American Statistical Association, 74, 427-431.
Friedman, M. (1997). If only the U.S. were as free as Hong Kong. Wall Street Journal, 8, 14.
Facchini, F., & Melki, M. (2011). Growth and Political Ideology in a Democracy: the French experience 1871 – 2009” EPCS, Rennes, France, 28th-1st May.
Heerden, V. (2008). Finding the Optimal level of Taxes in South Africa: A Balanced Budget Approach. Department of Economics, Working Paper.
Hearth, S. (2010). The Size of the Government and Economic Growth. An Empirical Study of Sri Lanka, working paper (published).
Husnain, M. I., (2011). Is the Size of Government Optimal in Pakistan: A Time Series Analysis, 1975-2008. Journal of Economics & Economic Education Research, 12 (2).
IMF (2005), International Financial Statistics, International Monetary Fund.
Karagianni, S. (2009). Evidence for Non-Linear Causality between Public Spending and Income in the European Union Countries. The Journal of Applied Business Research, 25 (1).
Mavrov, H. (2007). The size of government expenditure and the rate of economic growth in Bulgaria. Economic Alternatives, 1, 52-63.
Scully, G. (2008). Optimal Taxation, Economic Growth and Income Inequality in the United States. National Center for Policy Analysis, Policy Report No. 316.
State Bank of Pakistan. (2010). Handbook of Statistics on Pakistan Economy, State Bank of Pakistan
Tanzi, V. (2006). Corruption, Governmental Activities, and Markets. IMF Working Paper No.94/99.
Vedder, R., & L. Gallaway. (1998). Government size and economic growth. Joint Economic Committee, Washington, D.C. 5.
Published
2018-12-27
How to Cite
Akhtar, N., Tahir, M., Tariq, B., Rashid, M., & ., O. (2018). An essay on optimal size of government: a case study of Pakistan. Amazonia Investiga, 7(17), 453-461. Retrieved from https://www.amazoniainvestiga.info/index.php/amazonia/article/view/760
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