Meta-analysis of the Effect of Fiscal Policies on Long-Run Growth

The issue of whether the public sector enhances or retards long-run economic growth has been debated passionately in recent years. We use meta-analysis to shed light on the issue. A sample of 93 published studies, yielding 123 meta-observations, is used to examine the robustness of the evidence regarding the effect of fiscal policy on growth. Five fiscal policy areas are considered: general government consumption, tax rates, education expenditure, defence, and public infrastructure. Several meta-analytical techniques are applied, including descriptive statistics, contingency table analysis and rough set analysis. On balance, the evidence for a positive effect of conventional fiscal policy on growth is rather weak, but the commonly identified importance of education and infrastructure is confirmed. The results are sensitive to several research design parameters, such as the type of data, model specification and econometric technique. The top two tiers of journals appear less supportive of the conventional priors with respect to government and growth than lesser-ranked journals. © 2003 Elsevier B.V. All rights reserved.