The following is an excerpt from our short course entitled “What Could Governments Do for Us?”
In our previous posts, we discussed the difficulties faced by Congress and the president when deciding the best mix of taxation, spending, and borrowing. We also reviewed specific budgetary choices concerning liberty and justice, national security, the advancement of national interests abroad, and natural resource management. Today’s post briefly covers the topics of how governments budget for national productivity and the quality of life.
Most governments provide at least some public services to improve the productivity of their citizens and firms and, often, to improve the quality of life. Governments at the local level may provide some of those public services, while others may be provided at the state or national level. (See our short course on Federalism here.)
Many governments provide educational services: some to inculcate national ideology, some to build a productive workforce, and others to ensure that citizen voters are well-informed. Most provide at least some health care services to ensure a productive workforce, if not for a better quality of life. Most also provide at least some infrastructure such as drinking water, sewerage, roads and rail, airports and sea ports, a postal system, electricity, and networks for information-communications technology. Job creation is more likely when these services are in place and well maintained.
Some governments aim to satisfy those with power first. For example, in Nigeria, in 2016, there was a proposal to spend more on the state house clinic (that serves the president and other high officials) than would be spent on all the country’s teaching hospitals.[i] Some governments have let much of their infrastructure deteriorate because they lacked the needed skills and sufficient finances or prioritized other expenditures. Yet, many governments have managed to extend good quality public services to most of their citizens. (For example, World Bank data on World Development Indicators such as water supplies and sanitation services.)
Many governments invest in science and technology. They do this to strengthen their military, make their private sector more competitive, improve health care, and improve their capacity to manage the natural world around them (weather forecasts, for example). In the U.S.A., federal research and development spending was 5% of discretionary spending or 0.76% of GDP in 2013. Government spending as a share of GDP in other countries that same year was 0.99% in South Korea, 0.83% in Germany, 0.60% in Japan, and 0.44% in China.[ii]
To see the full short course, click on the blue link “What Can Governments Do for Us?“
We offer several other short courses on the U.S. system of government. You can find them here: https://cffad.org/topics/
[i] See https://www.premiumtimesng.com/news/headlines/197827-2016-budget-buhari-to-spend-more-on-state-house-clinic-than-on-all-federal-teaching-hospitals.html
[ii] Data are from UNESCO, Gross domestic expenditure on R&D (GERD) and GERD by source of funds.
