I think there is a lot of reason to believe that we have a uniquely ineffectual government. Excluding defense expenditures, and counting all levels of government, Canada spends less public money per capita, while having cheaper healthcare, education, better transit, etc. For example, we spend more per capita on education than any OECD country except Switzerland, and get worse results. Our federal system (where states aren’t mere administrative bodies taking direction from the central government) makes things particularly difficult. Which means the aspects of government closest to the people (roads, schools, housing, transit) are often the worst managed.
In at least one case, we have problems in part due to insufficient regulation, rather than excessive regulation. Pharmaceutical companies spend over $5 billion per year on direct-to-consumer advertising in the US; this practice is effectively illegal in Canada, although the regulations surrounding it are poorly enforced.
That $5 billion advertising spend is going to get paid for elsewhere in the health industry ecosystem, and probably several times over once all of the associated costs are considered.
I wonder some days just how much economic damage will have to be done, just how many millions of lives will need to be ruined, before the American public starts to accept that unregulated capitalism is dangerous in almost every market.
I think you are on to something looking at state governments but I don't find the answer completely satisfying because a lot of US States are similarly sized to European countries. Why should we expect the State of NY (~20M people) to have a worse government than the Netherlands (~17M people)? I don't have a great answer to this question.
Perhaps it's just the separation of government in general. People can only pay attention to so much and the attraction of national politics pulls attention away from state politics. That's just not something that happens in many other places.
I never fully realized it until now, but the US, with it's federated structure is putting itself at a competitive disadvantage to other countries.
It's the worst of both worlds, where states have a flaccid independence (they can legislate but not control their borders, thus cannot avoid the free-rider problem). Nation-wide standards that don't fall under the commerce clause have to be bribed into half-ass existence, and then only for a political season.
We're structurally incapable of benefiting from economies of scale or standardization in government.
And what to do about it? Most conservatives want smaller federal government, which reduces the aggregate size and expenditure for government, but exacerbates fragmentation. On the other hand, progressives want larger federal government, which introduces standardizing layers, but spends way more on aggregate government.
I find both of these positions frustratingly vague, and I'm eager to blame them for making the problem appear intractable. They're perfectly intuitive enough to make people have a gut-feeling for what it means without actually thinking about what it means, and in that sense avoid actually debating that, which would be productive.
What does "large" and "small" even mean? Governments are complex social/cultural/legal systems, no matter what the "size". I'm pretty sure waterbed theory applies here[0].
(This is not a critique of your post, but about the US discourse surrounding this in general. At least how it comes across to me as a European)
[0] "the observation, ascribed to Larry Wall, that some systems, such as human and computer languages, contain a minimum amount of complexity, and that attempting to "push down" the complexity of such a system in one place will invariably cause complexity to "pop up" elsewhere.",
I think we're saying the same thing. Small Federal Government either means larger state governments or a whole bunch of undesirable problems like increased pollution, job discrimination, etc, and those issues are not uniformly distributed because of the states.
There is little privatization in the U.S. in the areas I mentioned. For example, less than 10% of Americans go to private or charter schools. In Denmark, Japan, Spain, Korea, and the Netherlands, that number ranges from 20-65%. Few American roads are privately-operated (mostly some turnpikes). In contrast, all of the French autoroute (highway) system is private. Much of Japan's highway and transit system is private too.
Transit is almost entirely publicly owned and operated in the U.S. For example, Amtrak is both owned and operated by the government. In contrast, Deutsche Bahn and Eurostar are are private companies (though subsidized by the government). SNCF, though owned by the government, is run like a private company. E.g. in contrast to Amtrak, where only a single route produces an operating profit, 80% of SNCF's routes produce an operating profit. Japan's key railroads are privatized, and the biggest one (JR East) receives no public subsidy.
Anti-development housing policies that drive up prices are all done by the government (compare to Japan's lax zoning laws).
Healthcare is really the only thing that's more privatized in the U.S. versus other OECD countries, though it's less than you might think. About 50% of healthcare spending in the U.S. comes from direct public money, comparable to Korea, versus 70% in Canada or Spain, and 75-85% in Italy, Germany, France, and the U.K. However, if you account for indirect expenditures (public subsidies for health insurance), the total comes to about 65%, not much less than in Canada or Spain: http://www.pnhp.org/news/2016/january/government-funds-nearl....
