Practically, though, it is not easy to ascertain whether the most favorable size of government has been achieved. Although, the provision of services and public goods can promote growth, revenue-raising mechanisms and inefficient provision of services and goods can impede growth (Schick 1998, p18).
Evidence from Central Asia and Europe lists factors such as fiscal consolidation and budget deficits, size of government, quality governance, and composition of taxes and expenditure as some factors that affect fiscal growth. In this regard, public fiscal systems play a huge role in economic growth of any country. Enacting a stable fiscal position need a sustainable fiscal consolidation. In most cases, these have to be recurrent. Indeed, they are largely considered as a basic characteristic of the evolution of the market. Such consolidations are undertaken across Central Asia and Europe, albeit with relative degrees of success (Berthélemy & Varoudakis 1996, p72). Fiscal growth for any country would require successful financial adjustment. On the other hand, unsustainable financial consolidation is counterproductive and can sometimes discourage investor confidence since they fail to establish sound financial position for the government (Scartascini 2004, P37).
Sustainable government adjustments are required to create long-lasting financial space for expenses that propagate growth. Indeed, evidence from financial bodies such as the Organization of Economic Co-operation and development suggest that make-up of financial adjustment is paramount for fiscal sustainability (Berthélemy & Varoudakis 1996, p12). Consolidations, which heavily rely on, tax cuts and increases in public ventures have been unsustainable while consolidations with structural reforms in their public expenditure reforms have lasting effects and financial growth by extension. Perhaps this is