Table 5reports the estimates of the growth effects from aggregate revenues and expenditures as well as from differentsubcategories. Model 1 controls for the conditioning information set in addition to total revenues whichmeasure the overalleffect that government size has on growth. The coefficient on total revenues carries a negative sign and is statisticallysignificant at the 1% level. Likewise, model 2 renders a comparable coefficient on total expenditures (as an alternativemeasure of government size) equal to−0.05, which should capture the benefits of spending minus the cost of taxation inaddition to the reduction of growth due to deficit financing. years 1990 to 1992 are incorporated to correctfor the impact of German reunification
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