Government size, demographic changes, and economic growth

"This paper examines the effect of government size on the growth rate of per capita output by incorporating demographic variables. Evidence from more than 86 countries suggests that the demographic variables not only affect economic growth, but also determine the size of government. Both the young and the old age dependency ratios were positively related to the size of government, while population density and population size were negatively related to the size of government. Moreover, when the demographic variables are included in the growth equations, the effect of government size on the growth rate of per capita output became insignificant rather than, as prior studies showed, significantly negative."