This paper investigates the effect of government consumption spending as a share of GDP on economic freedom in Iran. The impact of size of government on economic freedom is similar to a Armey curve which can be used to determine the optimum government size (see Barro, 1990; and Armey, 1995). This paper examines the relationship between economic freedom and size of government. Using GMM approach, the unemployment and productivity is influence on the economic freedom and according to the results growth of investment and non-oil export is positive effect on economic freedom and unemployment is negative effect on economic freedom. JEL classification: C33; H50; O40; F41