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Government Spending in Canada

Summary:
The Fraser Institute in Vancouver, Canada has published a short but illuminating study of federal government spending for the last 150 years. (Disclosure: I am a senior fellow with the Fraser Institute.) The study is titled "Prime Ministers and Government Spending: A Retrospective." The authors, Jason Clemens and Milagros Palacios, highlight the most important findings in their summary. Important note: their data are on program spending and do NOT include interest on the federal debt. Here's what I found striking. 1. The World War II ratchet, a la Robert Higgs in Crisis and Leviathan. (See their Figure 1.) As in the United States, real government spending per person fell off a cliff after World War II, but not close to it's pre-WWII level. See my Mercatus study "The U.S. Postwar

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The Fraser Institute in Vancouver, Canada has published a short but illuminating study of federal government spending for the last 150 years. (Disclosure: I am a senior fellow with the Fraser Institute.) The study is titled "Prime Ministers and Government Spending: A Retrospective." The authors, Jason Clemens and Milagros Palacios, highlight the most important findings in their summary.

Government Spending in Canada
Important note: their data are on program spending and do NOT include interest on the federal debt.

Here's what I found striking.

1. The World War II ratchet, a la Robert Higgs in Crisis and Leviathan. (See their Figure 1.) As in the United States, real government spending per person fell off a cliff after World War II, but not close to it's pre-WWII level. See my Mercatus study "The U.S. Postwar Miracle" for more on the U.S. case.

2. Arguably the most-libertarian Canadian prime minister, Sir Wilfrid Laurier, didn't do so great on reining in government spending, to put it mildly. (Again, See Figure 1.)

3. The best two on program spending who were Prime Ministers for more than a few years were Brian Mulroney and Jean Chretien, both of whom decreased real per capita spending on programs by an annual average of 0.3 percent. I highlighted Chretien's accomplishments in my Mercatus study "Canada's Budget Triumph." Why didn't I highlight Mulroney's accomplishments? Because I looked at overall federal spending, not just program spending.

David Henderson
David Henderson is a British economist. He was the Head of the Economics and Statistics Department at the OECD in 1984–1992. Before that he worked as an academic economist in Britain, first at Oxford (Fellow of Lincoln College) and later at University College London (Professor of Economics, 1975–1983); as a British civil servant (first as an Economic Advisor in HM Treasury, and later as Chief Economist in the Ministry of Aviation); and as a staff member of the World Bank (1969–1975). In 1985 he gave the BBC Reith Lectures, which were published in the book Innocence and Design: The Influence of Economic Ideas on Policy (Blackwell, 1986).

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