This paper discusses the relationship between government expenditure productivity and optimal government size in OPEC. To get this aim, the Barro endogenous growth model, extended by Karras, is put into effect. Combinative data for OPEC over 1970-2006 time period is applied in order to estimate Karras model. The results show that, labor productivity is greater than capital productivity and also, government expenditure productivity is lower than 1 which is equal to 0.51. So the Barro rule is violated and this means that the government size in these countries is higher than optimum. Average government size and also optimal government size in Iran, in compare with other OPEC members’ government, is higher. Optimal government size for OPEC-members countries is about 22.11 per cent.
Sokhanvar, M., & Mehregan, N. (2013). Optimal Government Size and Its Productivity in Oil Exporter Countries,With an Emphasis on Iran. journal of islamic finance research, 1(1), 51-64.
MLA
Mohammad Sokhanvar; Nader Mehregan. "Optimal Government Size and Its Productivity in Oil Exporter Countries,With an Emphasis on Iran". journal of islamic finance research, 1, 1, 2013, 51-64.
HARVARD
Sokhanvar, M., Mehregan, N. (2013). 'Optimal Government Size and Its Productivity in Oil Exporter Countries,With an Emphasis on Iran', journal of islamic finance research, 1(1), pp. 51-64.
VANCOUVER
Sokhanvar, M., Mehregan, N. Optimal Government Size and Its Productivity in Oil Exporter Countries,With an Emphasis on Iran. journal of islamic finance research, 2013; 1(1): 51-64.