Why is government so large in the Western world? This has been a question of central importance to the Mont Pelerin society since its very beginnings.
I start with what Gordon Tullock (1994) has called the paradox of government growth. Before the late nineteenth century, government was a very small percentage of gross domestic product in most Western countries, typically no more than five percent. In most cases this state of affairs had persisted for well over a century, often for many centuries. The twentieth century, however, saw the growth of governments, across the Western world, to forty or fifty percent of gross domestic product. Other measures of government intervention, such as the regulatory burden, have grown as well. Whether or not we think these developments are desirable, they are among the most important features of the last one hundred and fifty years and they cry out for explanation. My basic focus is on the United States, although a comparative perspective can help us make sense of the evidence. I’d like to address the key question of why limited government and free markets have so fallen out of favor. Of course this investigation is only one small piece of that larger puzzle.