I recently came across several excellent articles discussing productivity issues in English-speaking countries. thesis Ben Southwood, Samuel Hughes, Sam Bowman It begins by showing how far the UK lags behind France in construction – housing, motorways, subways, high-speed rail, nuclear power plants and other forms of infrastructure.
France and the United Kingdom are a particularly interesting pair of countries to look into because they have so many similarities. Both have a population of between 65 and 70 million people, and their GDP per capita is about the same. (In nominal terms, the UK is slightly higher; in PPP terms, France is slightly higher.) Both were important colonial powers, both had nuclear weapons, and both are countries in which a single dominant metropolitan area plays an unusually large role. .
But there are also some important differences. France has more than twice the land area. France is also slightly more socialist. French workers are more productive but work fewer hours, so total output per person is roughly the same. SHB is as follows:
France is notorious for high taxes. consideration employer side taxes French company in addition to what its employees actually see You will need to spend €137,822. If a worker earns a nominal salary of €100,000, they will take home €61,041 in wages and employer-side taxes. For a UK worker to take home the same amount after tax (£52,715, equivalent to €61,041), a UK employer would only have to spend €97,765.33 (£84,435.6) in wages and employer-side taxes.
But despite these high taxes, onerous regulations, and strong unions, French workers are far more productive than their British counterparts. Closer to the Americans than to us. France’s GDP per capita is about the same as the UK. That’s because French workers spend more time on holidays and have shorter working hours.
What explains France’s prosperity despite high taxes and high business regulations? France can afford such a large-scale interventionist state because it has done a great job of building things up for Britain to block. house, infrastructure and energy supply.
Basically, Britain and France have some things they are good at and some things they are bad at. The UK is relatively good at encouraging people to work. France is relatively good at capital construction. Within the EU, both countries are only mid-level in terms of GDP per capita.
So why is Britain so bad at making things? First of all, it is a recent problem. Britain excelled at building homes and infrastructure.
It’s a long report, but there are three themes that come up again and again.
1. NIMBYism
2. Excessive regulation and bureaucracy
3. Inefficient government production
The agile problems that the US experiences in certain regions such as California or the North East are a nationwide problem in the UK. And even when projects are approved, Britain imposes excessive regulations on new infrastructure and energy projects, similar to those faced in the United States, driving costs even higher. And finally, central governments tend to be more wasteful than local governments or private businesses.
French cities pay 50%, and sometimes 100%, for almost all public transport projects that affect them (regional and national governments contribute the remainder). Naturally, they fight energetically to curb cost increases and are usually successful. The Madrid Metro, one of the best systems in the world, is entirely funded by the Madrid region. The smaller and poorer municipality than London managed to finance a 203km subway extension with 132 stations between 1995 and 2011, approximately 13 times the length of modern London’s Jubilee Line Extension. Other countries still operate private infrastructure delivery systems. Tokyo’s legendary public transportation network is provided and regularly expanded by private companies such as: Fund development through land speculation around the station. France’s excellent motorway system is built and maintained by private companies, which manage it with active and financial discipline.
In the UK, the centralization of infrastructure provision by central government has fundamentally undermined these incentives. No public institution will have as existential a concern with cost control as its private counterpart. But central government has less interest in this than fiscally responsible local governments because the costs are spread across a much larger constituency.
The second article is as follows: Matt IglesiasShows how government regulation reduces public sector efficiency. I think this finding will surprise both the left and the right, who (depending on your perspective) see government regulation as either government unfairly disadvantaging the private sector or preventing private sector abuses. Yglesias said they were both wrong. Regulation is a much bigger problem for the public sector.
Some parts of the private sector have actually been deregulated (airlines) while others have become more tightly regulated (housing). But the most heavily regulated sector of all is the public sector. And this excessive regulation of the public sector is putting us in a vicious cycle. First, we make it very difficult for public center institutions to carry out their duties. Second, it gives public sector institutions a reputation for being incompetent. Third, the low social prestige of public sector work leads to the selective exit of more ambitious people. Fourth, in their rush to get something done, elected officials often find ways to bypass existing public sector institutions, further damaging their reputations.
And what is really needed is not more money or more action on how free markets are spinning out of control or a new anti-growth paradigm.
What we need is a vigorous public sector reform campaign to increase the likelihood that X will happen in a reasonably timely and cost-effective manner when elected officials want the government to do X.
Yglesias discusses how many counterproductive government regulations only apply to the government sector and not the private sector. This includes well-known examples such as the “Buy America Rule” for procurement and the Davis-Bacon Rules for labor used in the public sector, but extends to many other less well-known examples of governments shooting themselves in the foot.
It is interesting to compare the UK study with the Yglesias post. Both reports appear to have been written by pragmatic policy experts who would like to see more built on them. However, I would describe Southwood, Hughes and Bowman as center-right, while Yglesias is center-left. Clearly both sides believe there is an important role for both the public and private sectors, but SHB clearly emphasizes the benefits of privatization, while Yglesias sees how reforms that make it easier to build could help restore confidence in government’s abilities. Emphasize that there is. To get something useful done. This may partly reflect differences in the types of officials they seek to influence.
What I liked most about these two articles was the way they challenged long-held stereotypes. Ben Southwood has an interesting story. twitter thread It mocks the stereotype that France is more communitarian than Britain. Iglesias often uses the same type of humor when trying to get readers to think about terms like ‘regulation’ and ‘neoliberalism’ in a less dogmatic way, one that is more consistent with what is actually happening in the real world.
P.S. I suspect that some of the problems discussed in this report also occur in other Anglo-American countries such as Canada and Australia. I hope the commentators there will weigh in on this topic. Why is it so difficult to make things in English-speaking countries? Our legal system?
