Government Expenditure and Economic Growth: A Cross-Country Study

Abstract

This paper examines the relationship between the share of government consumption expenditure in GDP and the rate of growth of real per capita GDP. The work of the U.N. International Comparison Project has recently made available new estimates for over 100 countries of both per capita GDP and the share of government consumption. These new estimates are based on direct price comparisons rather than exchange rate conversions.' As a result, the statistics for different countries are more comparable and cross-country studies will be more reliable.