Study of optimum size of government in selected countries with emphasis on agricultural sector

  In this study, optimum size of government for selected countries is investigated by using the analysis of panel and time series data. The Army curve was used for this purpose. The data were collected from the World Bank database site as well as the Iranian Economic Information Center for these countries during 1970-2002. Based on the findings of Army curve panel estimation for 13 selected countries, 57 percent increase should happen in the government size in order to get the optimal size. While, time series estimations for individual countries imply an increase in the government size by approximately 15.02 percent on average. Optimal size of the Iranian government was determined to be 26.64 percent and considering the current government size, the government expenditure share in gross domestic product should be increased.  The Army curve phenomena were not observed in agricultural sector based on the analysis of panel data. While, separate estimations  for individual countries suggested expanding the government size by 14.9 percent on average. The optimal size of government in agricultural sector of Iran was determined to be 33.8 percent that is more than current government size.