4 ms·

Correlation can be an indication of a causative association. I believe in that case of the growth in the public sector and the slowdown in GDP growth, it is.

• nl 9y ago
  I believe in that case of the growth in the public sector and the slowdown in GDP growth, it is. Do you have any evidence of that at all? Because I have evidence showing the opposite: eg China has an estimated public sector value of between 29% and 50%[1] and it is generally regarded as a high-growth economy (6.5%+ growth(, while somewhere like Greece (22% public sector, 0% growth) isn't. In-fact, eyeballing that table doesn't show much apparent correlation at all. There are high-growth, high-public sector countries, high-growth, low public sector countries, low public sector, low growth AND low public sector high growth countries. [1] https://en.wikipedia.org/wiki/List_of_countries_by_public_sector https://en.wikipedia.org/wiki/List_of_countries_by_public_se...
  • Jabanga 9y ago
    Share of employees working in the public sector is a more narrow statistic than the total role of government in the economy. The share of GDP consisting of government spending is a better measure of that. The correlation between the size of government, as percentage of GDP, and GDP growth, is strong. [1] China has substantially lower levels of social welfare spending. Its healthcare spending as a percentage of GDP is 5.5% for example [2]. Labour regulations are also much less onerous. You can use IQ tests to filter candidates for example, which would be extremely illegal in the West. [1] http://ime.bg/uploads/335309_OptimalSizeOfGovernment.pdf http://ime.bg/uploads/335309_OptimalSizeOfGovernment.pdf [2] http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS?locations=CN http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS?locations...