Most governments are too large to maximize job creation and economic growth new study finds

Wien (OTS) - A new study by economists with the Institute for
Market Economics (IME) in Sofia, Bulgaria, using the latest OECD
data, finds that the government sectors in OECD (developed countries)
are too large relative to their private sectors to maximize economic
growth. Economists have long known that the government sector can be
too small or too large to maximize economic growth, job creation, and
the social welfare of its citizens. Governments that do not
adequately protect the people and their property and the rule of law
may be too small, while governments whose size and inefficiencies
cause a misallocation of resources are too large.

Over the last several decades, economists have tried to determine
and quantify the optimum size of government (recognizing that not all
governments and societies are the same). Most studies have shown the
optimum size of government is between 12% and 30% of GDP. The new
IME study finds (using standard methodology) the government sector
should be no larger than 25% (and perhaps considerably smaller) to
maximize GDP growth. All major governments, including the U.S.,
Germany, U.K., France, and Italy greatly exceed that level. The
average government sector for the OECD countries now exceeds 41% of
GDP.

The results of the study indicates that policy makers who are
enlarging their government sectors in the name of "economic stimulus"
are likely to be retarding the renewal of economic growth and job
creation rather than enhancing it.

The study was sponsored by the non-partisan Center for Freedom and
Prosperity Foundation in the United States and the European Coalition
for Economic Growth based in Vienna, Austria.
The entire study - The Optimum Size of Government - may be obtained
from here along with a video which explains the study and its
results.

Link to the study:
http://ime.bg/uploads/335309_OptimalSizeOfGovernment.pdf
Link to the video: http://www.youtube.com/watch?v=aEtrjx2nztA

Rückfragehinweis:
Ms. Svetla Kostadinova Mr. Andrew Quinlan
Executive Director
Institute for Market Economics, Bulgaria
Tel: +359 2 952 62 66
Email: svetlak@ime.bg
Web site: www.ime.bg/en/

Dr. Barbara Kolm
President
European Coalition for Economic Growth
Phone: +43 664 341 0579
Email: barbara.kolm@e-growth.eu
Web site: http://www.e-growth.eu

Mr. Andrew Quinlan
President/CEO
Center for Freedom and Prosperity, USA
Phone: + 1 202 285 0244
Email: info@freedomandprosperity.org
Web site: http://www.freedomandprosperity.org

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