Do governments matter?

22 May 2015 6:42 PM | John Heap (Administrator)

In the UK, we have a new government ... similar to the last one... but without the need for a coalition.  I make no political comment on the government we have ... only that I am glad we have a single-party government that should be capable of directing its own strategy.

In another context, wearing another hat, I have been ruminating on the degree to which governments influence productivity.  My starting point was that governments have little long-term effect on productivity, though they can have an impact in the short-term.  Long-term trends though tend to proceed irrespective of government intervention until there is some revolutionary event that triggers a 'great leap forward'.

However, as I started to think - and to draft the paper I am working on - I started to change my mind.

I started thinking about the infrastructure elements that underpin high productivity - health, education, skills, transport, communications ..... in addition to the macroeconomic and research/innovation culture.  Clearly these are all factors where government has a major role to play ... and major influence to bear.

So, perhaps governments do have a major role to play ... in creating the potential for high productivity that industrial and commercial organisations can build on.

So, if you are in the UK, I hope you voted - for the greater productivity good - and not personal economic well-being.  Only the former can deliver the latter in the longer-term

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