Abstract:

The literature on the relation between government efficiency and economic growth is divided into two chapters. While some studies say that government efficiency increases economic growth, others say it reduces economic growth. Using country data, this study aims to analyze the impact of government efficiency on economic growth in developing countries. For this purpose, the GMM (Generalized Moments Method) estimates were obtained from the data of 78 developing countries between 1996-2015. According to the results of this estimate, government efficiency has a positive-oriented and statistically meaningful impact on economic growth. Accordingly, level of economic growth increases in parallel with government efficiency in the countries examined. The impact of government efficiency on economic growth is higher than economic variables such as labor, capital, inflation and trade deficit. Thus, in order that the developing countries elevate their level of economic growth, they initially need to elevate the efficiency level of their governments.

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