NCPA - National Center for Policy Analysis

Forces That May Constrain Government

October 15, 1996

Global forces are at work that will eventually constrain the size of government, argues University of California-Irvine economist Richard B. McKenzie in the November issue of Reason magazine.

Here are some of the factors he cites:

  • Changes in technology have made capital more mobile -- allowing entrepreneurs to choose those areas of the world they wish to invest in after comparing tax and regulatory burdens in areas of interest to them.
  • So governments must compete with one another by reducing taxes and regulations, as well as privatizing.
  • These forces have led Asian and Latin American countries to free their economies.
  • They are also pushing Western European nations -- albeit kicking and screaming -- to cut back their welfare states.

McKenzie says the competition for economic growth has forced President Clinton to forego the more liberal policies he might have preferred, in favor of somewhat more fiscally prudent policies.

Source: Perspective, "The End of Big Government?" Investor's Business Daily, October 15, 1996.


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