Private sector shrinkage and the growth of industrialized economies: Reply

Further tests and thoughts on the OECD data lead me to conclude that, if anything, my 1986 paper underestimated the magnitude of the inverse relation between economic growth and government size. If one takes the nominal-based measure of government scale, as advised by Saunders, the significance levels, coefficient magnitudes and goodness of fits improve over what I found with my initial investigation. I would suggest that Saunders reconsider his reluctance to believe that the size of the public sector is unrelated to economic growth in OECD countries over this time period.One additional thought appears relevant to the current policy debate concerning budget deficits and economic performance within the major industrialized economies. The empirical work displayed here and in my 1986 paper suggests serious problems associated with the various proposals urging governments to raise taxes and/or ease fiscal policy. Elsewhere, I have suggested that available empirical evidence implies that plans to increase taxes as a way out of budget deficits are plans that carry the potential for raising government spending and possibly future deficits as well. Coupled with the evidence presented here, we should also recognize the potential of tax increases to raise the level of government participation in a country and, accordingly, exert inverse influences on its future economic performance as well. As suggested in my 1986 paper, the empirical evidence may suggest the following irony: While political participants may crave larger and larger non-market resource allocations, their future ability to satisfy that craving may very well be severely constrained by the satisfaction of that same appetite.     

Reviews

Recently, various authors have examined the relationship between growth in government size and total economic growth. In each case, the authors permitted only a monotonic relationship. This paper examines the issue of a non-linear relationship between growth in government and overall growth in the economy.Government contributes to total economic output in various ways. The provision of Pigovian public goods enhances the productivity of the private sector inputs increasing total output. However, the public decision-making process can result in an inefficient quantity of public goods. The likelihood of this outcome increases with the size of government. Further negative effects are created by the revenue raising and spending mechanisms of government, and the increasing diversion of resources into unproductive rent-seeking activities. The magnitude of these effects is likely to increase with the relative size of government.     

Effects of positional restraint on oxygen saturation and heart rate following exercise

This report assesses the effects on peripheral oxygen saturation and heart rate that positional restraint induces when a person is prone, handcuffed, and "hog-tied." Peripheral oxygen saturation and heart rate were monitored at rest, during exercise, and during recovery from exercise for 10 adult subjects. The effects of positional restraint produced a mean recovery time that was significantly prolonged. Consequently, the physiological effects produced by positional restraint should be recognized in deaths where such measures are used.     

Fiji: country profile

Fiji is a country consisting of 300 South Pacific islands, of which the largest is Vitu Levu, which includes the capital, Suva. The islands are home to 700,000 people, of whom 50% are Indian, 46% Melanesian, and the rest Chinese or European. The official language is English, and the major religions are Hinduism and Christianity. Literacy is 79% for men and 64% for women, whose status is generally low in this patriarchal society. Infant mortality is 27/1000 live births, but life expectancy is 70 years. The British began sending missionaries and manufactured goods in the early 1800s and annexed the islands in 1874 as a source of sugar, for which they expropriated the land and imported the Indians as agricultural workers. Sugar remains the largest export along with coconut oil, gold, and timber. Manufactured goods, food, fuel, and chemicals are imported, and the national debt is over $200 million. Foreign investment, mostly by Australia, is $13.2 million. Inflation is 20%; 200,000 people are unemployed, and poverty is general except for the urban elite. The Fijian dollar is worth US. 80. Independence, granted in 1970, replaced colonial control with military governments, currently that of Colonel Rambuka, who refused to allow a democratically elected government to take office. Faced with a declining economy and the political power of the fascist Taukei movement, the Indians, who had been the shopkeepers, craftsmen and bureaucrats during the later period of colonial rule, have been emigrating en masse.     

Swaziland: country profile

Although Swaziland had been independent from colonialism for 20 years, a powerful monarch, King Mswati II, continues to control the country's political, religious, and social system. Swaziland has a population of 676,000, half of whom are under 15 years of age. The infant mortality rate is 105/1000 live births and 25% of children die before they reach their 5th birthday. Life expectancy is 54 years. Tribal chiefs, representing the king, hold and distribute about half of the national land. Most of the fertile land remains in the hands of white settler farmers. The concentration of income in foreign companies and urban centers has exacerbated poverty in rural areas. Depreciation of rand-linked local currency has boosted export earnings, but it has also raised the price of food and medical imports. Swaziland's main exports are sugar, wood pulp, chemicals, and fruit, most of which go to the UK and South Africa. The major food crops are maize, beans, groundnuts, and sorghum. About half of the working population is engaged in small-scale subsistence farming, but food yields are declining. The major producers are foreign companies attracted by Swaziland's low taxes and cheap labor supply.     

The Virtuous Polity, The Accountable Polity: Liberty and Responsibility in The Federalist

The Federalist claims to present a republican response to thetypical political problems faced by republics. That solutionrequired a departure from all models of republics known at thattime, and in particular a break with Anti-Federalist modelsthat posited heavy reliance on responsibility, understood aseither political accountability or as moral and political virtue.The Federalist challenges the Anti-Federalist notion that a"no-gap polity" is the means to safe and effective republicanism.It also challenges those who believe that virtue of people orrulers is the precondition of a republican polity. Publius doesrequire quasi-virlues of certain sorts—and thus does notrely entirely on calculating selfinterest—but these aresignificantly different from the virtues posited by earlierrepublican theorists or certain contemporary interpreters ofThe Federalist.     

The transition of migratory patterns in medium-sized cities

"The authors attempt to present some empirical findings regarding a phenomenon which they chose to call the 'transition in migratory patterns'.... The general hypothesis states that: changes in migratory patterns are due to an interaction between those economic, political and social processes which affect the distribution of the population; and that this interaction is also highly influenced by macroeconomic politics--an arena where technology plays a dominant role." Data are for Guadalajara and the state of Jalisco in Mexico. (SUMMARY IN ENG)