Bryan Caplan  

The Libertarian Case for Divided Government

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My former student Stephen Slivinski, now director of budget studies at Cato, has just published his first book, Buck Wild: How Republicans Broke the Bank and Became the Party of Big Government. There's lots of neat stuff in this book, but the best is his chapter on the libertarian benefits of divided government.

Slivinski tabulates that under the average united government - i.e., one-party control of the presidency, House, and Senate - the growth of real per-capita government spending is 3.4%. Under divided government, this growth rate is only 1.5% - less than half as fast.

That's a big difference. In contrast, united Democratic government and united Republican government look virtually the same: 3.3% government growth under Democrats vs. 3.6% under Republicans.

The most libertarian configuration of all turns out to be Democratic president + Republican Congress. Average rate of government growth: .4%. (And Steve doesn't even mention the other plausible libertarian benefit of this combination - less interventionist foreign policy).

I'm tempted to say "God, I miss Clinton." But that gives too much credit to Clinton personally. I don't think that Clinton wanted smaller government. But the unintended consequence of his endless quarrel with the Republican Congress was precisely that.

P.S. For some weaker state-level findings of the libertarian benefits of divided government, see my piece "Has Leviathan Been Bound?" in the 2001 Southern Economic Journal.


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TrackBack URL: http://econlog.econlib.org/mt/mt-tb.cgi/553
The author at Divided We Stand United We Falll in a related article titled The Un-Carnival of Divided Government writes:
    Bryan Caplan claims in his post "The Libertarian Case for Divided Government" at EconLog, that he taught Stephen Slivinski everything he knows. And so we find ourselves offering up yet another plug for Slivinski's book (I believe this is the third me... [Tracked on August 29, 2006 12:53 PM]
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DS writes:
The most libertarian configuration of all turns out to be Democratic president + Republican Congress. Average rate of government growth: .4%.

What timeframe does this study look at?

The only time in my memory in the post WWII era when this combination existed was duing the 1990's and maybe 2 years when Truman was president. If you go back far enough its probably not relevant because from the Civil War to the 1920's the Republican party was most definitely the party of big government. Throughout the 19th century the Democrats were the party of small government, until William Jennings Bryan came on the scene.

Does anybody really believe that TODAY's Republican party would limit the spending of anybody, Democrat or Republican? Does this include Grover Cleveland's veto pen restraining big spending Republican congresses?

c writes:

The most libertarian configuration of all turns out to be Democratic president + Republican Congress. Average rate of government growth: .4%. (And Steve doesn't even mention the other plausible libertarian benefit of this combination - less interventionist foreign policy).

I'm tempted to say "God, I miss Clinton." But that gives too much credit to Clinton personally. I don't think that Clinton wanted smaller government. But the unintended consequence of his endless quarrel with the Republican Congress was precisely that.

I've heard a lot about this fact since William Niskanen published a simple chart documenting this effect back in - what? - 2004.

Heaven knows I'm not 1/1,000,000th the economist that Niskanen is.

But isn't this an induction from a very small number of data points? What are the chances this is coincidence?

And if it's not coincidence, is there any danger that publicizing the existence of this truth could shrink or eliminate the effect?

mw writes:

"I've heard a lot about this fact since William Niskanen published a simple chart documenting this effect back in - what? - 2004."

I've been posting about the benefits of divided government for several months, including linking to Slivinski's work at Cato. There are two relevant Niskanen documents that I have found. One is a 2003 article, and the second a 2004 white paper co-authored with Peter Van Doren.

Both are linked from my blog post: "Divided Government, Statistics, and War"

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