Test evidence for the OECD countries, 1965‐85: the relationship between the size of the public enterprise sector and economic growth

Examines empirically the proposition that a large public enterprise sector for an economy acts as an obstacle to a healthy rate of economic growth. The empirical analysis concentrates on the experience of the OECD countries for the years 1965‐85. Single and multiple equation‐models of economic growth are specified with the size of the public enterprise (PE) sector included as an explanatory variable. In general, the evidence fails to support the hypothesis of a negative relationship between PE and economic growth.