Is the Government of Guyana too big, too little or the right size for the economy?
Alongside the debates about the roles/functions of government in the Guyana economy, there has been another equally enduring economic debate as to whether presently the government is too big, too little, or just about right-sized. This week’s column will pursue this topic.
Similar to the case of government’s roles in the economy, economists do not make categorical pronouncements on the optimal size of government in an economy. Not unsurprisingly therefore, global practices in this regard vary immensely.
Much of the difficulty in securing consensus on the optimal size of government in the economy resides in disagreement over the appropriate way to measure that size. Many economists consider this as total government expenditures as a share of GDP. Others use different variables, such as government revenues as a share of GDP, or the number of government employees as a share of total employment.
From a broader perspective it is useful to note that, in the course of a country’s economic life, many aggregates grow larger with the passage of time. One such aggregate is the size of a country’s projected annual Budget. Despite this, one finds that in each succeeding year of annual Budget presentation, the Ministry of Finance makes the silly boast …..To continue reading, login or subscribe now.