The optimal size of government has been an argument not only in public, but also in academic and political area for a long time. This paper aims to analyse the relationship between the government size and economic performance of Macau, adopting the time series data (1970-2012) in order to manifest the government size in different stages. The findings support the hypothesis of Armey curve with inward U shape relationship, where the size of Macau government had once been optimal in the past. However, the size of government can easily be affected by socio-economic factors and the implemented public administrative theories. This paper suggests that the new Public Service Theory can be considered as an evaluation of optimal government size, avoiding the pitfall of vicious cycle by demand-driven expansion of government size followed by contraction, and then by expansion again.