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Does ‘Big Government’ Hurt Growth? It’s Not as Simple as That

  • By Sefa Awaworyi Churchill, Mehmet Ugur and Siew Ling Yew
  • January 7, 2017
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Since the late 1970s it has largely been the consensus that “big government” is detrimental to growth. This manifested after the financial crisis when countries, including previously fiscally-comfortable countries like Germany and the UK, adopted austerity programs, ostensibly to spur growth by cutting government expenditure.

But our research shows the story is not so simple. We found that studies tend to reflect selection bias. Findings that indicate a negative association between government size and growth are more likely to be published than those that show either a positive or no association.

Our research also found that the affect of the size of government is different between developed and developing countries and that there is a lot we don’t know about the optimal size of government, and whether some parts of government should be smaller than others.

The existing research is inconclusive

The existing research on the effect of the size of government on economic growth is actually contradictory, with some researchers asserting that a bigger government enhances growth, and others arguing that it hurts growth.

The arguments for a positive impact of a big government rely on examples like the potential of infrastructure development to create jobs, or intervening...

Memo to the President: Strengthening Partnerships with State and Local Governments

The new president and Congress need to forge a new partnership with state and local governments to restore public trust and confidence in the federal government and to mobilize the resources needed to address critical domestic issues. Over time the lines between federal, state and local responsibilities have become blurred. The result is a fragmented system ill-suited to address a wide range of pressing domestic issues.

At the same time, while the state and local role in implementing federal programs has expanded, the federal government has come to treat states and localities more as constituents and less as partners and agents with a common interest.

Goals of a Stronger Intergovernmental Partnership

Challenges such as affordable health care, quality education, climate change, income inequality, homeland security, civil rights and deteriorating infrastructure require a strong federal role. But a federal role alone will be insufficient. Significant progress will require the coordinated actions of state and local governments as well. The federal government needs to establish a new paradigm that substitutes collaboration and cooperation for command and control—a paradigm that:

  • Recognizes the importance of a coordinated intergovernmental response to critical issues.
  • Provides ready access to the data and analysis needed to develop...

It's Time to Bury A-76—It Worked Once, But Its Day Is Past

Last month, Government Executive’s Charlie Clark posited the question of whether, in a Trump Administration, public-private competitions under the policy and methodology known as A-76 would be or should be revived (“Will Trump Bring Back Outsourcing and A-76?”). As the article demonstrated, opinions on the issue, which was for many years the focus of harsh, often bitter debate, have not changed much. But mine has. Despite having long been, and continuing to be, an outspoken advocate of expanding the use of competition to drive higher government performance and greater efficiency, I believe A-76’s time has passed and it would be wise to let this sleeping dog lie.

Make no mistake about it. Competition is the greatest single driver of performance and cost improvement. In fact, the data demonstrate clearly that savings to the government averaged around 20 percent simply by virtue of introducing A-76 competitions into areas where there previously had been none. And a significant Rand Corporation study demonstrated that those savings were, in fact, largely sustained over the life of the contract (there was almost no longitudinal data for work retained in-house).  

That’s the good news, and the primary argument for bringing A-76 out of...

The Most Unforgivable Email Mistake If You Want a Response

Making grammatical mistakes in your email subject lines correlates with fewer responses to your emails, suggests an analysis by the email management tool Boomerang.

The company used an automated grammar-checking software to spot errors in 250,000 emails and tracked those emails’ response rates. Mistake-free subject lines received a response 34% of the time, compared to 29% of the time for emails with one or more errors. The more errors an email subject line had, the less likely the email’s recipient was to respond.

Not all mistakes had the same impact. The mistake most punished by non-response was not capitalizing the first letter in a subject line sentence. Emails with this flaw only received a response 28.4% of the time, compared to a 32.6% response rate for email subjects with correct capitalization—an approximate 13% drop in overall response rate.

The Best And Worst Ways to Quit Your Job

What’s the best way to leave your job?

Quitting a job isn’t the most popular New Year’s resolution, but many of us have had fantasies about starting another year by leaving the office forever, perhaps in a blaze of glory—recall Steven Slater, the JetBlue flight attendant who cursed out passengers over the intercom, grabbed a beer, and jumped out of the plane via the emergency slide (paywall) before being subsequently arrested.

The folks in HR don’t generally recommend it. If you value your reputation, and plan on working again in the same field, leaving on reasonably amicable terms is a good idea.

There are seven basic ways of resigning, according to a Harvard Business Review article by Anthony Klotz and Mark Bolino, a pair of business professors who surveyed more than 500 managers and employees. The styles range from accommodating to destructive.

From the employer’s perspective, the preferred methods are what Klotz and Bolino call Grateful and In the Loop. Grateful employees, who may be leaving reluctantly, are conscious their departure is going to be a problem, so they work with their managers to find or train replacements. They also may have kept their...

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