In the last century, the greatest growth sector in the economies of high-income countries has been government. Whether such growth has had positive or negative effects on economic well-being is one of the most controversial and important issues of our time. In this comprehensive economic study of the role governments play in contemporary (primarily U.S.) society, Edwin S. Mills posits that the social efficiency, equity, innovativeness, flexibility, and growth of economies depend on the ways in which governments relate to economic activity. Operating under the assumption that governments are motivated to achieve social efficiency and equity, The Burden of Government employs fundamental, but nontechnical, economic theory to analyze what governments should and should not do to affect domestic economies.
Considerable use is made of long-term historical trends and of more contemporary, post-World War II data. Economic analysis of this detailed historical data provides insights into ways in which societies function and how they might function better. Defining social efficiency as the best use of a society's resources to make people as well off as possible, Mills uses the framework of normative (welfare) economics to analyze
- What governments should and should not do to promote social efficiency
- Appropriate national government macroeconomic policies
- Regulatory actions of federal, state, and local governments
- The role of governments in poor countries
- What private groups can do better than governments and what governments can do better than private groups
Mills argues that the belief that governments know people's preferences better than people do is not a legitimate reason for governments to intervene to control behavior. Yet, he points out, there may be many reasons why private behavior does not lead to resource allocation that would enable people to be as well off as possible. If so, there may be methods by which government can intervene to make people better off. The "burden of government" is to assess the feasibility of these methods and to implement acceptable courses of action. Mills' treatise deals exhaustively with the complex social and economic ramifications inherent in employment of such methods.