It’s a question as old as politics itself: How big should government be? Should it be lean and minimal, stepping in only when markets fail? Or should it be expansive and protective, ensuring that no citizen falls through the cracks?
This isn’t just a matter of budget sheets or tax rates. It’s a question that touches on our values, our identities, and our deepest hopes for the kind of society we want to live in. In their thoughtful chapter, “How Big Should Government Be?”, economists Lars Jonung, Jaakko Kiiskinen, and Sixten Korkman explore how this question is not simply technical—but deeply psychological, political, and cultural.
What they uncover is that debates over the size of government are, at their heart, debates about what we owe each other.
The Economic vs. Emotional State
From a technical standpoint, economists have long debated the “optimal” size of government. Too small, and basic needs go unmet. Too large, and bureaucracy may stifle innovation and growth. But as Jonung and his colleagues show, there’s no universally correct answer—because the size of government that people desire depends less on economic outcomes than on trust, culture, and ideology.
In high-trust societies (like many Nordic countries), citizens are more willing to accept higher taxes in exchange for strong public services. They view the state not as an imposition, but as a shared resource. In low-trust societies, however, even modest state expansion can be viewed with suspicion—seen as wasteful, corrupt, or coercive.
This suggests that the psychological size of government often matters more than its fiscal size. How people feel about the state determines how much of it they’re willing to accept.
Freedom vs. Security: A False Choice?
One of the oldest fears about a large government is that it threatens individual freedom. The state, in this view, is a potential overreacher—telling people what to do, how to live, and how to spend. This fear fuels calls for deregulation, lower taxes, and more privatization.
But Jonung and his co-authors point out a compelling counterargument: freedom also requires security. Without public health, education, transport, and safety nets, many people are less free—not more. They become trapped by poverty, illness, or inequality.
So the real question may not be “how big should government be?” but “what kind of freedom are we talking about?” Freedom from government? Or freedom through government support?
This reframing is crucial in today’s world of rising inequality and climate uncertainty. The state is not just a controller—it can be a guarantor of basic dignity.
Government as a Reflection of Collective Will
The authors emphasize that the role of government is not fixed—it evolves based on societal values. In times of crisis (war, economic collapse, pandemics), people often call for more government. In times of prosperity, they may demand less.
These shifts are not just practical. They’re existential.
Government becomes a kind of mirror: reflecting what we believe about fairness, responsibility, and what it means to live together. A society that expands healthcare or education through the state is making a statement—not just about efficiency, but about who counts and who deserves care.
Thus, debates over government size are really debates over solidarity. How much are we willing to pool our resources? How much do we trust others to use those resources well? And how deeply do we believe that others’ well-being is tied to our own?
Efficiency vs. Empathy
Jonung and his colleagues also highlight the tension between economic efficiency and social empathy. Smaller governments may lead to leaner bureaucracies and faster-moving markets. Larger governments may ensure that no one is left behind—but at a cost of higher taxes and slower processes.
There’s no perfect equilibrium. But perhaps the deeper question is this: What are we optimizing for? GDP growth alone? Or the health and resilience of the population?
Too often, the size of government is framed in terms of economic burden. But what if we framed it in terms of moral investment?
What if the real question wasn’t “how much government can we afford?” but “how much shared responsibility can we imagine?”
Final Reflection: A Choice That Shapes Us
“How big should government be?” is not a question with a simple answer. It’s a question that forces us to reckon with our deepest social instincts: for independence and for interdependence. For autonomy and for belonging.
The authors of this chapter don’t give us a definitive formula. Instead, they offer something more powerful—a call to dialogue and self-awareness. Because in the end, the state is not an abstract machine. It is us. Our taxes, our policies, our collective will made visible.
So as we debate public spending, taxation, welfare, and regulation, let’s ask not only how much is too much? but also: How much do we care about each other? How much do we trust one another? And how far are we willing to go to build a society that reflects those values?
Because the true size of government is not measured in dollars. It is measured in what we dare to imagine, together.