4 - Government Performance and Efficiency

Summary

Governments should provide value for money from public spending. They do so when they perform well on core tasks and ensure efficiency by spending wisely. Core tasks on which we measure performance and efficiency include the quality of public administration, education, health and infrastructure, as well as economic stability, prosperity and income distribution. The picture for performance and efficiency is very mixed across countries. The three ‘small’ governments of Switzerland, Australia and Ireland perform best overall, with a 50% higher score than the worst performers. Efficiency differences are even greater. ‘Small’ governments as a group tend to do best as regards public administration, the economy and overall. ‘Medium’-sized governments perform least well on the whole but show a wide divergence: some of them are very efficient in providing education, health and infrastructure. ‘Big’ government countries show more equal income distribution but at the ‘price’ of higher taxes and unemployment. Needless to say, this analysis is illustrative and needs to be taken with a grain of salt.