Efficient government size: France in the 20th century

The benefits and costs of government suggest an efficient government size. We investigate efficient government size by analyzing the relation between public spending and real GDP for France in the period 1896-2008. The results show a co-integration nonlinear relationship. Our time-series data on France represents one of the longest periods studied in literature. Our empirical findings suggest that efficient government size measured by public spending was reached when public spending was around 30% of GDP. Conclusions point to particularities of countries that suggest efficient government size is specific to different countries. (c) 2013 Elsevier B.V. All rights reserved.