Public Sector? A Panel Analysis

Information and communication technologies (ICT) have the following effects: lowering costs, increasing competition, enabling administration, and abolishing the constraints based on time and place in production process. In this paper, it is investigated that whether the aforementioned effects can prevent public sector's unnecessary enlargement and clumsiness or not. For this purpose, OECD countries have been taken into account and standard errors corrected panel procedure has been applied. Empirical results shows that high growth rates of number of internet users, ratio of exports of computers to total exports, international travels and the ratio of total exports to GDP markedly reduces the growth rate of taxation and to some extend decreases the growth of public expenditures thereby prevents oversized public sector.