Does too much government investment retard economic development of a country? Available to Purchase

The purpose of this paper is to understand how the effect of the government size per capita on the steady‐state level of output and on the growth rate differs between LDC’s and developed countries. It is shown that an increase in government size will increase the steady‐state level of output if the economy is at a low steady‐state (underdeveloped), and will decrease the steady‐state level of output if the economy is at a high steady‐state (developed).