Public Sector Growth

There have been very few countries with a large measure of economic freedom. Rabushka (1978) reports on about a dozen small states that had free market economies before the 19th century. Most of them disappeared. Free market principles spread through Western Europe and North America in the 19th century, but regulation and taxation have grown in the 20th century in all of these countries. Governments have grown in size and power and now have a substantial regulatory role in most western countries. In the last twenty-five years taxes have risen faster than output in all the principal market economies. Nutter (1978).