Introduction

Last week I demonstrated how huge government activity is in Guyana’s national economy.  It has averaged at least 60 per cent of GDP in recent years even when we use the much larger 2006 rebased GDP series.  I was careful to caution however, against drawing simplistic conclusions from this observation.  There are a number of neo-conservative theorists who seek to establish that there is a relationship between the size of government activity in an economy and that economy’s economic performance thereby suggesting that, the larger the size of government activity, the weaker is economic performance.  This is pure ideology and there is no reasoned scientific basis for this relation.  It nevertheless finds strong echoes in present day neo-conservative circles in the United States and Europe.  Such studies are intended to support political calls for reducing the size of government …..