Mohammad Ibrahim Akbari
Abstract
The role of government
in the economy has long been a subject of debate among economists and various
economic schools. Most economists consider the most important tasks of the
state to include security, public services, health, and education. However,
some believe these tasks are insufficient and advocate for more extensive state
involvement in the economy, including production, distribution, economic
policymaking, and price control. This paper examines the effect of government
size on the economic growth of selected G20 member states over the period from
1990 to 2018, using the Panel data model. In this study, government spending is
defined as a percentage of GDP, with the second power of government spending
used as an indicator of government size. The results show that government size
has a direct and significant effect on economic growth, while the second power
of government size has a negative impact on economic growth. Additionally, the
formation of gross fixed capital has had a positive impact on economic growth.
Keywords: Government Size, Economic Growth,
G-20 member states, Panel data