Government expenditure efficiency plays a noteworthy role in the association between government expenditure and economic growth. This study scrutinized the relationship between efficiency and size with economic growth. We used panel data for five SAARC countries from the period of 1990 to 2015. We used data envelopment analysis for measuring the efficiency scores and incorporated in growth equation. After that we used two stage least square (2SLS) robust techniques due to endogeneity problem for finding the optimal size of government expenditures. We found that efficiency lowers the size of government expenditure required to maximize growth. Combine effect of efficiency and size have increased economic growth. It is recommended that government should take steps to improve the efficiency of government expenditure, after that government is able to achieve the optimal size of expenditure. Supervisor:- Dr Muhammad Jamil