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It is not additional spending. It is the share of total spending controlled by government growing at the expense of share of spending being controlled by market
by ETH_start 2y ago
It is not additional spending. It is the share of total spending controlled by government growing at the expense of share of spending being controlled by market actors like consumers and private firms.
This leads to less effective allocation of capital, because large monopolistic government bureaucracies don't have the structure or incentive to perform anywhere near as efficiently as market actors.
- dv_dt 2y agoI think there is data that says the opposite (particularly in the context of Piketty), there is a reduction of efficiency when too much is controlled by overly concentrated capital structures.
- ETH_start 2y agoThe data all shows that higher government spending is correlated with lower rates of economic growth. This study both provides data and provides a number of citations to other studies which provide data on this correlation: https://web.archive.org/web/20170821004405/http://ime.bg/uploads/335309_OptimalSizeOfGovernment.pdf https://web.archive.org/web/20170821004405/http://ime.bg/upl...