27 May 2006

Less is More

When it comes to government spending, less is more. Less government spending and involvement in the economy - both in terms of regulatory interference and taxation burden - are associated with higher rates of economic growth, better productivity and more diverse markets for products. This is supported by country-specific evidence and several long-running international indices ranking economic environments.

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Overall, the study concludes that "It may be surprising, even counter-intuitive, to find that countries with leaner governments spend more on health and education than those with larger governments (and have been growing that expenditure at a faster rate), that they have a better standard of living, better employment records and similar spending on income support. But the data... should give policy-makers some confidence in arguing [that] ...the leaner governments clearly benefit their citizens more than the narrow illusory benefits offered by larger governments."

http://www.tcsdaily.com/article.aspx?id=052206B

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