Economic Integration and the Public Sector

Abstract

Economic integrations have a positive effect on growth and development of national economies and in a greater welfare of the society. But the growth of national economies has a negative impact on the growth of the size of government. It seems, based on the cases of Poland, Lithuania, Latvia and Malta, that we have with the reduction in the size of the state stronger effects of economic integration on the growth of national economies. Furthermore, with the reduction in the size of the state we have also a stronger impact of economic growth on the growth in the size of government. In other words, is the state smaller in its size, then the impact of economic integration on public sector growth is bigger. With the use of indicators for economic growth, like the gross domestic product as well as it’s per capita level and it’s growth rates, and with the use of indicators for the size of government, like the number of total public employees and the percentage of public expenditure and revenues of the gross domestic product, the mentioned hypotheses in this research are confirmed.