From Britain, More Evidence That Smaller Government Is Better Government

The past week has seen the publication of two important studies on the virtues of smaller government by our friends in the United Kingdom.

Neither paper is short, and both are technical in places, but they are both analytically careful and important contributions to the most important debate of our time.

Today, from the Centre for Policy Studies—founded by Heritage patron Lady Margaret Thatcher—comes “Small Is Best: Lessons from Advanced Economies.” Written by Ryan Bourne and Thomas Oechsle and backed up by a detailed econometric analysis, it finds that, in developed countries from 1965 to 2010, a higher tax-to-GDP ratio has “a statistically significant, negative effect on growth.” The same is true of spending: The higher it goes, the worse growth gets. And countries with lower taxes and less spending do better educationally, and no worse on employment and health, than the big-spending countries.

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