Do governments of the left spend more? Not necessarily, concludes an MEI publication

MONTREAL, March 26, 2013 /CNW Telbec/ - Which American president presided over a 39% jump in the relative size of government? The "right-wing" Republican George W. Bush. In Quebec, which political party reduced the relative size of the state by 19% over 10 years? The "left-wing" PQ governments of Parizeau, Bouchard and Landry.

The terms "left" and "right" are often used to characterize the propensity of a government to increase or decrease public spending. But do these labels actually allows us to properly judge the policies of parties in this regard? Not really, according to a new publication from the Montreal Economic Institute (MEI).

"In the cases we examined, we found no systematic correlation between the ideology of the party in power and the evolution of public spending as a share of GDP. The notion that the left is more spendthrift and the right is more thrifty when it comes to economics does not stand up to scrutiny. One must guard against misleading shortcuts in order not to colour one's analysis," says Michel Kelly-Gagnon, President and CEO of the MEI.

To properly understand economic reality, explains Vincent Geloso, coauthor of the Note, it is necessary to move beyond ideological clichés and focus instead on the facts. What emerges then is a whole other picture, often quite different from the official rhetoric of political parties, whether they claim to be of the left or of the right. The MEI publication explores certain explanations put forth by other researchers to try to better understand this phenomenon.

The Economic Note entitled Who Spends More: Left or Right? was prepared by Michel Kelly-Gagnon, President and CEO of the MEI, and by Vincent Geloso, doctoral candidate in economic history at the London School of Economics and an economist at the MEI. This publication and its technical annex can be consulted at iedm.org.

The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its publications and conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.

SOURCE: MONTREAL ECONOMIC INSTITUTE

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