Monday, November 18, 2013

Government Size and its Consequences

There are two important theories that explain government size and its consequences. Essentially, one theory explains  that the negative consequences of larger governments is that larger governments are plagued with bureaucratic  inefficiency and special-interest-group interest, while the other theory explains that positive consequences of larger governments are the better providers of public goods and better correct externalities such as pollution.

Thus, to determine if larger governments are better than smaller ones it would be quite useful to first determine if larger governments are better providers of public goods. That determination can be made using several methods where one of the best ways would be to examine environmental quality for air pollution for different sizes of government, but there are many factors to be accounted in that to ensure control variables do not affect the results. However, I found many sources on the internet describing much research that shows that there is a negative relationship between government size and the quality of a public good such as environmental quality by examining air pollution. This is a powerful finding that seems to indicate that the second theory that larger governments are better providers of public goods is false.

This leads to the question of why governments are so large in the first place? Well, the reading seems to partially answer that question to me, but I still have a hard time believing that it is fully correct, and I will not discuss the reasoning behind that since it involves my personal beliefs. Also, I may be just be overly skeptical since much political science is involved. However, the research showing the negative relationship shows that there is uncertainty in many fundamental ideas in political economics and political science, so when it comes to public choice it can be very difficult for me to understand the effectiveness of using of economic tools to deal with traditional problems of political science.

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