This paper examines the relationship between government size and economic growth in rich countries using an econometric panel study of 22-23 OECD countries from 1970 to 1995. The authors find that, after addressing various econometric issues, there is a robust negative relationship between government expenditure and economic growth. The more econometric problems are addressed, the more robust the relationship appears. The results show that an increase in the government expenditure ratio by 10 percentage points is associated with a decrease in the growth rate of about 0.7–0.8 percentage points. The findings are robust even according to the stringent extreme bounds criterion. The study also finds that taxation is negatively associated with economic growth, though the relationship is less robust than that for government expenditure. The authors conclude that analyzing rich countries separately provides a better understanding of the negative growth effects of large public expenditure. They also find that government expenditure and taxation are negatively associated with economic growth in a broader sample of rich countries, including non-OECD countries. The results are robust to various econometric tests, including extreme bounds analysis. The paper highlights the importance of addressing econometric issues in cross-country growth regressions to obtain reliable results.This paper examines the relationship between government size and economic growth in rich countries using an econometric panel study of 22-23 OECD countries from 1970 to 1995. The authors find that, after addressing various econometric issues, there is a robust negative relationship between government expenditure and economic growth. The more econometric problems are addressed, the more robust the relationship appears. The results show that an increase in the government expenditure ratio by 10 percentage points is associated with a decrease in the growth rate of about 0.7–0.8 percentage points. The findings are robust even according to the stringent extreme bounds criterion. The study also finds that taxation is negatively associated with economic growth, though the relationship is less robust than that for government expenditure. The authors conclude that analyzing rich countries separately provides a better understanding of the negative growth effects of large public expenditure. They also find that government expenditure and taxation are negatively associated with economic growth in a broader sample of rich countries, including non-OECD countries. The results are robust to various econometric tests, including extreme bounds analysis. The paper highlights the importance of addressing econometric issues in cross-country growth regressions to obtain reliable results.