On spending, sometimes the left gets it right

Everybody knows that governments of the left spend more than governments of the right, right? Well, like so many things everybody knows, this assumption turns out to be mistaken.

Actually, when you look at the record of the last 40 years, you find no systematic correlation between the explicit ideology of the party in power and the change in public spending as a share of GDP, which is main criterion in order to calculate the size of government. Indeed, the standard expectation was sometime exactly backward.

For instance, in the United States, the president who increased the relative size of the government the most (by 39%) was Republican George W. Bush, while the one who shrank it the most (by 14%) was Democrat Bill Clinton.

In Canada, over the same time period, both the greatest increase and the greatest reduction in the relative size of government were presided over by Liberal governments. From the late 1960s to the early 1980s, Pierre Elliott Trudeau and his successor John Turner increased public spending as a share of GDP by 40%, while the more recent Liberal governments of Jean Chretien and Paul Martin decreased it by 32%.

The message is clear: The idea that the left is more spendthrift and the right is more thrifty just does not stand up to scrutiny. A major study from the early 1990s looking at 15 industrialized countries over a period of 28 years draws a similar conclusion.

How can this be? One reason is the median voter theory. Parties of the left must shift to the right to appeal to the average voter, and parties of the right must shift to the left. Doing the opposite of what you believe in to increase voter support is the bread and butter of political action. So much so that, in the end, there isn't much difference between the two sides.

The prevailing climate of opinion can also push governments to adopt certain policies they might not otherwise have pushed. So can the economic circumstances of the day (ie: recession period versus a growing economy).

But whatever the reason behind the facts, the facts themselves are indisputable. Political parties that are allegedly more to the left don't necessarily increase the size of government more than the parties that are perceived to be conservative or right-wing.

Michel Kelly-Gagnon is President and CEO of the Montreal Economic Institute. The views reflected in this column are his own.
* This column appears in Sun Media newspapers, published both in several of Canada's key urban markets (Toronto, Ottawa, Calgary, Edmonton, Winnipeg and London) and in its 28 community dailies

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