Claudia1973 wrote:Craig said "But small it [Peru's government] is not."
According to a recent report at Heritage Foundation, Peru's "Total government expenditures, including consumption and transfer payments, are low. In the most recent year, government spending equaled 16.5 percent of GDP."
I don't want to minimize the less bad features of the Peruvian government. But I was thinking of these things.
1) The percentage of the population the government employs. Unfortunately, like many other things, you get more bureaucrats for your money in Peru.
2) The degree of control its laws pretend to exercise over economic activity.
3) The suffocating taxation system.
In theory these are all appear worse than the US. However, as I indicated, in practice
, it is much, much better than the US.
1) The countless bloated bureaucracies are ineffective and corrupt so they do much less harm than they might. Mostly they just are a waste of space.
2) Because Peruvians largely ignore the laws or get around them (via salutory corruption) economic activity is quite free on the small to medium scale. Mostly, all the government does is to prevent economies of scale and efficiency. This is sad but not prohibitive (as it is becoming in the US).
3) The government is so weak and ineffective that it is not able to collect much of the taxes theoretically due. As a result its revenue is very limited (and substantially dependent on income, like royalties, from large businesses) which, happily, severely limits its expenditures.
You need some historical perspective to understand that Peru's present government is basically the heritage of a communist state (the Velasco regime, the first Alan Garcia, etc.). It is now moving in a different direction, has improved enormously, and, in practice
, the situation is much better than the lingering remnants of its past would suggest.
Remember the fable of the blind men and the elephant? There is more complexity to Peru than one Googled statistic collected by people who have never been here and have no context that gives meaning to the number. I wish, I really wish, that the dimensions and pervasiveness of the Peruvian government really were fully described by the comparative smallness of the percentage of the Peruvian GNP it spends. If so, Peru would be an even better place than it is. But that is not so.