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The Obese State – A Political Metaphor or a Milestone?

The Obese State – A Political Metaphor or a Milestone? Economy Near Us (XLIII)

This is not the place and the occasion to deeply discuss the crucial (and endless) issue of the size of the state and its involvement in society (especially in the economy). From the minimal state shaped by the invisible hand (Nozick), to the contractual state instituted on basic principles (Rawls), to the socialist state constituted as the big brother, all of these versions have their pros and cons. However, regarding any of these types of state, a common topic could be of interest: the efficacy and/or efficiency of the works of the state. Regarding the public money, the efficacy of the state intervention (either through regulation/deregulation or through public spending) seems to be of interest (both politically and ethically) – thus, if an objective of common interest must be accomplished, the question of efficiency is not relevant at all; the only relevance is carried by the efficacy of the intervention. I strongly and irremediably believe that the money public should be associated with efficacy only. But is this belief beyond any doubt? Honestly, I have to accept that it is not. The main reason to doubt consists in the very structure of the public sector (nb: the private domain of the state is another issue entirely). I shall provide some considerations in this area. 

When does the obese state arise? 

Let us put forward the question of designing the structure of the public sector or, at a lower level, the structure of the central Government (however, for the remainder of the public sector, namely the governmental agencies and deconcentrated authorities, the analysis is similar). Why do we need a/the (central) Government? The answer is simple, and it cannot be rejected in any way: for providing public goods, that is, those goods that the private sector cannot produce (from reasons both economic – the profitability – and political – societal security).

It appears the (simplified) logic of designing the structure of the Government should be the following:

  1. establishing the list (as exhaustive as possible) of public goods which are mandatory to be provided for the society (for example: military defense, justice, public education, public health, social security, quality of environment, public order etc.);
  2. establishing the public institution functions which can guarantee the provision of the decided public goods (at an appropriate quantity, quality, and sustainability);

III. establishing the institutional structures (here, meaning organizations) sufficient to the purpose of executing the functions;

  1. endowing the institutional structures with resources and staffing them with qualified personnel for them to fulfil their mission.

Therefore, we have this sequence: I – II – III – IV. Of course, it is not the case that any new government put in place by the political game must begin by I, II, and so on, although any such a government could perform, on the go, some analyses and introduce some adjustments.

In this context, there are three ways in which the obese state can emerge:

  1. a) by reversing the two steps of stages II and III – that is, firstly the institutional structures are designed, then, based on them, the functions which those institutional structures effectively can deliver are designed in turn (Nota bene: so, not the functions which must be delivered); the result: the functions cannot be freely established anymore, because they are automatically inferred from the institutional structures;
  2. b) by reversing the three steps of stages II, III, and IV – that is, starting from the personnel who must be hired (regularly, from the political clientele of the party/ies that gained the legislative power), then creating the institutional structures to cover the personnel, and finally obtaining the functions which can be performed; the result: not only do the functions lose their relevance, but institutional structures lose their autonomy as well;
  3. c) by reversing the steps of all stages – that is, firstly the personnel are hired, then the institutional structures are designed, then the functions of institutional structures are inferred, and finally, the public goods that may be delivered are identified (yet not necessarily which will be delivered in fact).

In my opinion, these are the (logical) ways in which the obese state can arise. Obviously, the “degree of obesity” is proportional to the number of steps violated in the standard order – so, (b) provides a more obese state than (a), while (c) provides a more obese state than (b) (of course, the three paths verify the algebraic condition of transitivity). 

Some discussion 

First of all, I would say (à propos of the title of my communication) the syntagm obese state is not a political metaphor, but really a millstone in the functioning of society. The obese state is one of the most common cases of introducing the necessity of analysing the public expenditures from the perspective of efficiency, although, normally, as I said before, the public money should be examined under the angle of its efficacy only.

Secondly, the obese state simply increases the tax rate on income (and, in some circumstances, even the indirect tax rates) in order to support (namely to finance) the extra people, or extra institutional structures, or extra public functions, or (not so rarely as it seems prima facie) even extra public goods, to feed the obese state. Such a supra-charge in fiscality is both uneconomic and immoral, and economists could, of course, estimate the unnecessary tax burden which is working inside an obese state.

Thirdly, taking further the idea of useless (or hidden) taxation occasioned by the obese state, we could introduce the possibility that a new kind of corruption, more insidious, much less transparent, and even harder to penalize, may be put in place. How would one term a situation in which the political clientele is hired (or maintained in public positions), regardless of its professional competence, if not as the paying of private loyalty from public money? There is here, I believe, a double corruption, namely a double quid pro quo: 1) the political clientele is granted public money for its electoral support for political parties; 2) the political parties receive political services (in private interest) from the hired clientele, when the latter block, for example, in their institutions, the initiative of the political opposition.

Fourthly, it seems to me that the obese state allows, or facilitates (at any rate, is compatible with) a hidden (more clearly, an underground) source of financing for the political parties that gain and exert political power in society. Indeed, instead of the parties paying from their own private funds or transparent and non-discriminatory public funding, they simply (and legally, although, of course, illegitimately) pay the people who support or sympathise with them for their services; in fact, those parties pay their supporters from the public purse (i.e., state budget). It is clear that this fact is equivalent with a public financing of political parties involved.

The present formulation of the question is, obviously, a general and “civil” one. I think this issue deserves a more academic development, including definitions, quantifications (for example, “degrees” of the fatness of the obese state) and, of course, “weight loss remedies”. Maybe in some future interventions I shall analytically develop some of these issues.

 

 
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OEconomica No. 1, 2016