Monday, June 18, 2007

Solutions: Localism

Big Government enthusiasts swap ideas

After just two years of BOM, we have assembled a mountainous record of government waste and incompetence. So mountainous indeed, that the TaxPayers' Alliance's widely quoted estimate of £80bn pa wasted looks low.

But what are the solutions?

Clearly, the Big Picture solution is much smaller government. As we've blogged before, the international evidence says that once government grows much beyond 30% of GDP, additional spending achieves very little, even in terms of "social" (health, education etc) as opposed to "economic" objectives (the definitive account remains Tanzi and Schuknect's oustanding Public Spending in the 20th Century).

Britain's public spending is now about 43% of GDP, suggesting we are wasting around one-tenth of our national income. What's more of course, the additional taxation to finance the wasted spending disincentivises effort and enterprise, depressing growth (eg see this blog).

So we know where we want to get to; the question is how do we get there?

One very promising avenue is fiscal decentralisation- reconnecting tax and spend, and empowering local electors, by making local authorities responsible for raising the tax they need to finance their own spending (eg see this blog).

The Telegraph is currently running a good series on localism labelled Think Local. It's basically an update on the original Direct Democracy manifesto, and seems to be mainly written by Daniel Hannan and Douglas Carswell. It's already repeated the call for locally elected sheriffs (eg see this blog), and today it's proposing localised welfare.

As Carswell and Hannan point out, the Clinton 1996 welfare reforms in the US have been hugely successful:

"The number of families on welfare has fallen from 5 million to 2 million. There are 1.6 million fewer children in poverty. And, perhaps most impressive, the reforms lifted groups who had been untouched by every previous welfare initiative: poverty among black children fell from 42 to 33 per cent; among single mothers from 50 to 42 per cent."

And how did this miracle come about? Essentially by devolving responsibility:

"The centrepiece of the 1996 Personal Responsibility and Work Opportunity Act was to shift social security from the federal government to the states, and to give local authorities incentives to reduce their caseloads. Offered the freedom to experiment, the states seized it with gusto. Some incentivised employers to take on the workless; others organised schemes themselves; most made the receipt of benefits conditional on taking up job offers. Best practice quickly spread, as states copied what worked best elsewhere."

Coupled with fiscal decentralisation, such an approach in Britain would be very powerful. Local authorities responsible to local taxpayers for administering cost effective welfare would concentrate minds wonderfully.

What's that? We used to have that system before Lloyd George nationalised welfare a century ago? And Lloyd George got all his ideas from Bismarck, and was always a big admirer of BIG GOVERNMENT?
Well, I'm blowed.


  1. Bạn cần dịch vụ vận chuyển. Hãy đến với chúng tôi giao nhận 247. Với đa dạng các dịch vụ về vận chuyển có thể kể đến như: chuyển hàng từ Đài Loan về Việt Nam, gửi hàng từ úc về Việt Nam, ship hàng Đức về Việt Nam, chuyển hàng từ Hàn Quốc về Việt Nam giá rẻ...
    Ngoài ra chúng tôi còn có dịch vụ chuyển hàng từ pháp về việt nam. Nếu bạn ở Việt Nam và cần chuyển ra nước ngoài thì đã có dịch vụ chuyển hàng từ Việt Nam sang Đài Loannhận chuyển hàng từ Việt Nam sang Hàn Quốc để bạn sử dụng. Hãy liên hệ với chúng tôi khi cần nhé.

  2. Sâm AlipasSâm angela là những sản phẩm hỗ trợ sinh lý khá tốt trên thị trường thế giới dành cho cả nam và nữ.
    Muốn có làn da đẹp và mạnh khỏe nên sử dụng những sản phẩm collagen tốt nhất hiện nay như: collagen trà xanh
    hanamai fish collagen
    collagen de happy
    collagen shiseido enrichedcollagen nitta
    Maihada collagen
    và sử dụng phương pháp thay da mặt sinh học