Barro (1990) examines government spending in a simple model of endogenous growth. He extends models where private and social returns to investment differ, leading to suboptimal saving and growth rates. The model assumes constant returns to a broad concept of capital, including human and nonhuman capital. Government services, funded by taxes, affect production or utility. Growth and saving rates depend on the type and amount of government spending. With an income tax, decentralized choices of growth and saving are suboptimal, but if the production function is Cobb-Douglas, the government can achieve productive efficiency. Empirical evidence supports some hypotheses about government and growth. The model considers government spending as an input to private production, leading to constant returns to scale in capital and government services. The production function is written as y = Φ(k, g), where y is output per worker, k is capital per worker, and g is government services. The model allows for sectors producing physical and human capital. The growth rate of consumption depends on the marginal product of capital and the tax rate. The government's expenditure ratio, g/y, affects the growth rate, with higher g/y increasing the growth rate if g/k is small enough. The model also considers the effects of different tax systems and property rights on growth and saving. A flat-rate income tax leads to suboptimal growth, while a lump-sum tax can align with the command optimum. The government's consumption services, h, also affect utility and growth. The model shows that government spending on productive services, such as property rights enforcement, can enhance growth. However, nonproductive government spending, such as h/y, reduces growth and saving rates. Empirical studies support the model's predictions. Kormendi and Meguire (1985) found no significant relation between government consumption spending and growth rates. Grier and Tullock (1987) found a negative relationship between government spending and growth, particularly in OECD countries. Barth and Bradley (1987) found a negative relationship between government consumption spending and growth. Barro (1989) modified data to exclude defense and education spending, finding that government spending on infrastructure services correlates with growth. The model suggests that government spending on productive services, such as infrastructure, can enhance growth, while nonproductive spending can hinder it. The results highlight the importance of government efficiency and the role of public services in economic growth.Barro (1990) examines government spending in a simple model of endogenous growth. He extends models where private and social returns to investment differ, leading to suboptimal saving and growth rates. The model assumes constant returns to a broad concept of capital, including human and nonhuman capital. Government services, funded by taxes, affect production or utility. Growth and saving rates depend on the type and amount of government spending. With an income tax, decentralized choices of growth and saving are suboptimal, but if the production function is Cobb-Douglas, the government can achieve productive efficiency. Empirical evidence supports some hypotheses about government and growth. The model considers government spending as an input to private production, leading to constant returns to scale in capital and government services. The production function is written as y = Φ(k, g), where y is output per worker, k is capital per worker, and g is government services. The model allows for sectors producing physical and human capital. The growth rate of consumption depends on the marginal product of capital and the tax rate. The government's expenditure ratio, g/y, affects the growth rate, with higher g/y increasing the growth rate if g/k is small enough. The model also considers the effects of different tax systems and property rights on growth and saving. A flat-rate income tax leads to suboptimal growth, while a lump-sum tax can align with the command optimum. The government's consumption services, h, also affect utility and growth. The model shows that government spending on productive services, such as property rights enforcement, can enhance growth. However, nonproductive government spending, such as h/y, reduces growth and saving rates. Empirical studies support the model's predictions. Kormendi and Meguire (1985) found no significant relation between government consumption spending and growth rates. Grier and Tullock (1987) found a negative relationship between government spending and growth, particularly in OECD countries. Barth and Bradley (1987) found a negative relationship between government consumption spending and growth. Barro (1989) modified data to exclude defense and education spending, finding that government spending on infrastructure services correlates with growth. The model suggests that government spending on productive services, such as infrastructure, can enhance growth, while nonproductive spending can hinder it. The results highlight the importance of government efficiency and the role of public services in economic growth.