There is an inverse relationship between government efficiency and the size of government

4 Studies That Prove Small Government Works Better

An unlikely source confirms this reality.

Daniel J. Mitchell


I explained last year that there is an inverse relationship between government efficiency and the size of government.

And Mark Steyn made the same point, using humor, back in 2012.

Interestingly, we have some unexpected allies.

In a recently released study, two economists for the World Bank decided to investigate the effectiveness of government spending. From "Efficiency of Public Spending in Education, Health, and Infrastructure: An International Benchmarking Exercise":

Governments of developing countries typically spend resources equivalent to between 15 and 30 percent of GDP. Hence, small changes in the efficiency of public spending could have a significant impact on GDP and on the attainment of the government’s objectives. The first challenge faced by stakeholders is measuring efficiency. This paper attempts such quantification and verifies empirical regularities in the cross country-variation in the efficiency scores.

So they calculated how much different governments were spending and the results that were being achieved.

Using two different methodologies, here’s what they found for health spending and life expectancy:



The goal, of course, is to get good results (to be higher on the vertical axis) without having to spend a lot of money (in other words, try to be farther left on the horizontal axis).

Here are the numbers for education quality and education spending:



The economists then crunched all the numbers to determine the relationship between spending and outcomes.

The results may surprise some people:

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Read more: fee.org


Source: danieljmitchell.wordpress.com/