Introduction
In last Sunday’s column I argued that government activity is operating as a drag on the national economy. Several features of government spending exemplify this outcome, including 1) the poor to negative value returns for public sector spending, particularly its capital expenditures; 2) the unfortunate politicization of what should be commercial/business relations between the government and private businesses; 3) the widespread existence of situations where politics seemingly trumps economic efficiency in resource allocation; 4) the substantially reduced role played by the ‘rewards-punishment’ incentive mechanism, which routinely operates in private markets; and 5) the high private burden of taxation required to support this very high level of government activity, which in turn disincentivises private effort. These outcomes are reflected in the fact that several government development projects/programmes are extremely controversial and the subjects of intense public debate and criticism in the public media. These include the Amaila Falls project; the one laptop per family programme proposed by the Office of the President; the hydraulic projects centering on the Hope Canal; the proposed Marriott Hotel; and several housing projects around the country, including Pradoville II. These illustrations do not include the weekly, if not daily media exposure of very shoddy work performed by government contractors.
No doubt, it is as a result of all these considerations that several readers have queried whether there is any area of government involvement in the economy
