THE GOVERNMENT SECTOR, THE EXPORT SECTOR AND GROWTH

A three-sector, two-input growth model is developed which potentially allows for the separate identification of government and export sector productivity differentials and externality effects. Using data from a limited sample of OECD countries (which are the only countries for which reliable capital stock data are readily available), we find that the export sector is more productive than the rest of the economy, but that neither an externality effect nor a productivity differential can be detected in the case of the government sector.