Did you ever wonder which are the countries with the smallest government per capita in the world? Well, we have, and we got some news for you!
When we say that some government is big or small, it can mean different things. Its size can be measured by its power or influence, as well as the number of employees. Also, government size usually reflects the government’s spending relative to the size of the country’s economy. Furthermore, general government spending is an indication of the size of a government and its measured as a share of GDP and per person. The government that is characterized by centralization of political power, high taxation and spending, as well as extensive bureaucracy and various regulations and policies is considered as “big” government, while it’s opposite in the case of the “small” government. For those who are not familiar with the terms, here comes a brief introduction. GDP is “the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.” Nominal GDP estimates are used to determine the economic performance of a whole country or region in order to ease the comparisons on the international level. However, nominal GDP per capita cannot reflect differences in the cost of living or the inflation rates of different countries. What is used in those comparisons is GDP per capita at purchasing power parity (PPP). As the GDP is closely connected to the budget, we find necessary to mention the terms budget deficit and surplus, as well. Having a deficit would mean that government’s expenditures exceed revenues, or in other words – a government spends too much money. For example, Mexico’s government budget deficit was equal to -2.85 percent of the country’s Gross Domestic Product in 2016. In contrast, the government budget of Germany, which is one of the biggest ones in Europe, has a budget surplus, which indicates that revenues exceed expenditures. In general, as you can see, the world’s government budgets are measured by their revenues and expenditures. For example, Chinese government budget revenues are $2,672 trillion, while expenditures are $3,146 trillion! That is a huge amount of money! However, having in mind how many people live in China and how big the country is, it is quite a reasonable budget.
A deficit in government budget is something that occurs nearly every year, and it’s an issue in a number of countries. If you want to learn more about it, we advise you to check out the budget deficit by country for the year 2016. In general, government spending per capita by country should be a highly transparent thing. Therefore, the OECD made a country rankings according to the general government spending expressed as a percentage of GDP.
To get back to our topic, the terms “big” or “small” governments are also used to show how much a government is involved in certain areas of the public or private sector in a country. So, we can say that North Korea, for example, has a “big” government, as they decide and control almost every aspect of living in the country. On the other hand, Scandinavian governments would be examples of the small ones. The logical conclusion would be that the size of a country’s government is closely related to how free is its population, right? Meaning, the bigger the country’s government, the less free population is. Let’s test this hypothesis, shall we? First, check out our articles such as 15 Countries with the Freest Press in the World and 15 Countries With the Strictest Gun Laws in the World and then compare them to this one, and see it for yourself.
What is also interesting, is that some researchers examined the efficiency of small and big governments in terms of a number of employed people. They found out that countries with small governments are far more productive and efficient. “Small” governments post the highest efficiency among industrialized countries and the differences are shown in 40 percent higher scores than the “big” governments.
In order to create our genuine list of the countries with the smallest governments per capita, we had two steps in our research. First, we took suggestions from the sources such as the Quora and Visual.Ly, to check out the level of government expenditures as a percentage of GDP, and previously mentioned Cato Institue’s article on reasons why a small government is an efficient government. Also, we included the OECD’s country rankings. When we singled out the most mentioned countries, we checked the number of people employed in each of them (ministers, prime ministers, etc.). Once we obtained data, we ranked them in that manner. So, we are starting off our list with the biggest size government per capita. On the top of the list is the smallest one.
Let’s see which are the countries with the smallest government per capita in the world!