Is your government quietly making you poorer?
The World Bank data shows a negative correlation between government spending as a share of GDP and GDP growth rates across 113 countries. Countries with smaller governments tend to outgrow high-spending peers, with examples including Singapore and Bangladesh. This relationship suggests that there may not be a 'sweet spot' for government size as previously thought by economists.
- ▪Cross-country World Bank data shows a negative correlation between government spending and GDP growth rates.
- ▪Countries with smaller governments tend to outgrow high-spending peers.
- ▪The relationship between government spending and GDP growth rates fits a Power Law better than the traditional Quadratic Armey Curve.
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| Original publisher | Github |
| Canonical URL | https://julienreszka.github.io/economic-simulator/qa/does-more-spending-reduce-growth/ |
| Publication time | Sat, 30 May 2026 15:22:27 +0000 |
| Retrieval time | 2026-05-30T15:29:38.710Z |
| Last seen | 2026-05-30T15:29:38.710Z |
| Headline source | Publisher (no WeSearch rewrite) |
| Excerpt source | publisher body |
| Excerpt method | First ~120 words (~800 chars) of extracted publisher body, fair-use limited. |
| Summary | WeSearch · cerebras-chat (WeSearch summarizer) |
| Summary source text | contentText |
| Citation coverage | Summary is a WeSearch-generated derivative; primary citation is the original publisher URL. |
| Cluster | F0mHhrTq4iTq |
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| Ranking reason | Story pages are not engagement-ranked. Hub feeds use recency, with optional source-diversified chronological ordering (cap consecutive stories per source). No personalized ranking. |
| Publisher visit | Yes — open original |
| Substitutes article? | No — link-out required for full text |
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| Indexing | May the item be indexed (stored, ranked, made findable)? | Allowed |
| Snippet | May a short excerpt of the publisher's text be shown? | Allowed |
| AI summary | May WeSearch generate its own short summary of the article? | Limited |
| Retrieval / RAG | May the content be exposed for third-party retrieval-augmented generation? | Not asserted |
| Model training | May the content be used to train AI models? | Not asserted |
| Commercial reuse | May the content be reused commercially? | Not permitted |
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Opening excerpt (first ~120 words) tap to expand
← All questions Is your government quietly making you poorer? Cross-country World Bank data consistently shows a negative correlation between government spending as a share of GDP and GDP growth rates. Countries with smaller governments (Singapore ~15%, Bangladesh ~9%) tend to outgrow high-spending peers. The relationship fits a Power Law better than the traditional Quadratic Armey Curve: R²=0.42 vs 0.39 across 113 countries in the 2005–2023 structural sample. Full analysis: The Fiscal Power Law — Armey Curve ← PreviousThe economic theory that gave politicians cover to spend more — and got the data wrong Next →Every economist says there's a 'sweet spot' for government size. The data says there isn't.
Excerpt limited to ~120 words for fair-use compliance. The full article is at Github.
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