The Size of Government and U.S.-European Differences in Economic Performance

WPIEA2009092 Image
Price:  $18.00

Author/Editor: Norikazu Tawara, Gerwin Bell
Release Date: © April, 2009
ISBN : 978-1-45187-239-2
Stock #: WPIEA2009092
Stock Status: Available

Languages and formats available



An influential strand of recent research has claimed that large governments in European countries explain their weaker long-term economic performance compared to the U.S. On the other hand, despite these alleged costs, large governments have been popular with electorates. This paper seeks to shed light on this apparent inconsistency; it confirms an adverse effect of taxes on labor supply, but also finds evidence of efficiency-increasing government intervention. However, and especially in the core "Rhineland-model" European countries, actual government policies often depart from such efficient interventions, pointing to the possibility that voters prefer redistribution even at the cost of allocational efficiency.


Economic sectors , Public sector

More publications in this series: Working Papers

More publications by: Norikazu Tawara ; Gerwin Bell