Welfare-state responsibilities should be handled at the state level, not the federal level. The challenge is to get the national government out of the way

The Recipe for Good Government

By Arnold Kling

If we compare countries around the world, 

what factors are generally associated with good governance 

and what factors are associated with bad governance?

Recently, some prominent individuals have complained about the poor functioning of the U.S. government. Steven M. Teles called it a “kludgeocracy.” Francis Fukuyama called it the “Decay of American Political Institutions.” In an interview, President Obama noted that “we have these big agencies, some of which are outdated, some of which are not designed properly.”

What is the solution? Reorganization of the executive branch might help. Others have proposed campaign finance reform, less gerrymandering of congressional districts, or adopting a parliamentary system as an alternative to divided government. However, none of these offers a proven remedy.

Rather than look at government reform in terms of theory, I propose that we look at what works in practice. If we compare countries around the world, what factors are generally associated with good governance and what factors are associated with bad governance?

It turns out that a country's size, in terms of population, is an important negative factor. Large countries are less likely to be well-governed than are small countries.

For a quantitative measure of the quality of government, I used the Fraser Institute's Economic Freedom of the World Index. The 2013 values of the index ranged from a high of 8.97 for number-one-ranked Hong Kong to 3.93 for Venezuela, country number 152 on the list.

Certainly there are factors other than economic freedom that constitute good government. Human rights, political freedom, and minimal corruption should also count. Progressives would admire countries that have robust welfare states. The Fraser Institute rankings show a high correlation between economic freedom and these other factors. For example, many of the countries near the top of the list are known for their strong social insurance systems.

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