When I argue with my statist friends about the proper size and scope of government, they accuse me of not wanting public services.
My typical response is to explain that I am a strong supporter of markets as the method to get high-quality roads, schools, and healthcare.
But I’m wondering whether this answer pays too much attention to the trees and doesn’t focus on the forest.
After all, the debate isn’t whether we should be Liberland or Venezuela. It’s whether government should be bigger or smaller compared to what we have now.
So the next time I tussle with my left-leaning buddies, I’m going to share this chart (based on data from the IMF’s World Economic Outlook database) and ask them why we can’t be like the fast-growing, small-government nations of Asia.
To elaborate, not only do jurisdictions such as Hong Kong and Singapore enjoy impressive growth, they also get very high scores for infrastructure, education, and health outcomes.
In other words, these nations are role models for “public sector efficiency.”
What they don’t have, by contrast, are expensive welfare states that seem to be correlated with poor outcome for basic public services.
For all intents and purposes, I want to focus the debate on how much government is necessary to get the things people want, sort of like I did in Paris back in 2013.
I asked the audience whether they thought that their government, which consumes 57 percent of GDP, gives them better services than Germany’s government, which consumes 45 percent of GDP. They said no. I then asked if they got better government than citizens of Canada, where government consumes 41 percent of GDP. They said no. And I concluded by asking them whether they got better government than the people of Switzerland, where government is only 34 percent of economic output… Once again, they said no.
I assume (hope) Americans also would say no given these choices. And hopefully they would say yes when asked if we should be like Hong Kong and Singapore.
P.S. If I rotated the above chart clockwise by 90 degrees we’d have a pretty good approximation of the downward-sloping portion of the Rahn Curve.
[…] By way of comparison, the spending burden in Denmark in 1938, measured as a share of GDP, was only about half the size of government today in “small-government” jurisdictions such as Singapore and Taiwan. […]
[…] high levels of state capacity and very modest-sized governments. Consider, for example, the “Asian Tigers” of Singapore, Hong Kong, and Taiwan. These jurisdictions rank very highly for public goods, […]
[…] it’s worth noting that government could – and should – be much smaller even using an expansive definition of public goods and the role of […]
[…] and presumably has traveled the world. Hasn’t he noticed that nations with big governments don’t do a better job of providing public goods – even if we use an expansive concept of what government should be […]
[…] he cited for their successful approach – Singapore, South Korea, and Taiwan – all have a much smaller burden of government spending than the United […]
[…] because government is too small, yet the nations he cited as successful role models actually have much smaller public sectors than the United […]
[…] to deal with coronavirus, yet all the nations he cited for their effective responses actually have a much smaller fiscal burden than the United […]
[…] as I noted in November of 2018, they all have a smaller burden of government spending than the United […]
[…] What’s needed is not really “strong government,” but rather limited, competent, and effective government. Think Singapore, which does a much better job of providing core public goods while spending much less money. […]
[…] public goods if government consumes only a modest share of economic output. Yet that’s not what we see in the real […]
[…] why move to Switzerland when you can move to places where government provides similar services at even lower cost (assuming, of course, that anti-tax […]
[…] is accurate, why is Pakistan’s economy stagnant when there are prosperous jurisdictions with smaller spending burdens, such as Hong Kong, Singapore, and […]
[…] There’s also plenty of international data showing big government isn’t the way to get good roads, schools, and […]
[…] the Yellow Vests are either ignorant or hypocritical. After all, the burden of government spending is very onerous in France, and the country also has high levels of debt. So how is the government supposed to lower […]
[…] very broad definition of public goods (i.e., to include infrastructure, education, etc), it’s possible to finance government with very low tax […]
[…] prospered for 100-plus years without an income tax, or that taxes could be very low even with an elastic definition of what counts as public […]
[…] And even if you think infrastructure should be handled by state and local government, that definitely does not (or should not) imply a large public […]
[…] a closer look at fiscal policy, there’s a heavy burden of government spending (not as bad as France, for what it’s worth) and taxes consume a big chunk of household […]
[…] технологија – What’s required to finance roads, schools & healthcare од Даниел Мичел. […]
[…] на неделата нешто надвор од тема технологија – What’s required to finance roads, schools & healthcare од Даниел Мичел. По смената на власт, често го слушаме […]
[…] A huge chunk of their income is seized by tax collectors, yet they’re not getting better services in exchange. […]
[…] https://danieljmitchell.wordpress.com/2018/11/08/whats-required-to-finance-roads-schools-and-healthc… […]
Reblogged this on James' Ramblings and commented:
Reblogging for future reference: