How “bloated” are governments really?

“BLOATED, FAT and disgusting.” That is how Donald Trump described America’s federal government shortly after his return to office. On the campaign trail Mr Trump and Elon Musk repeatedly said that too many public-sector workers lead to waste and government overreach. The Department of Government Efficiency (DOGE), run by Mr Musk, has already cut 56,000 government workers; another 146,000 could follow. Mass layoffs in government are happening elsewhere, too. In Argentina President Javier Milei, who came into power in December 2023, sacked 51,000 government workers in his first 12 months in office. In Britain the Labour government wants to lay off 10,000 civil servants. Are the bureaucrat-bashers right to think that governments will work better with fewer workers?

Measuring and comparing the size of government workforces is tricky: no two bureaucracies operate the same way. The best data come from the International Labour Organisation (ILO), a UN agency that compiles public-sector employment data for 178 countries. Of those, only 80 have figures from later than 2023 and data are missing for the two most populous countries, China and India. The ILO’s numbers are based on national labour-force surveys and cover all categories of state employee, including regional-government workers, employees with short-term contracts and staff at public-sector firms (although they exclude private-sector contractors or consultants, whom many governments increasingly rely on).

Adjusted for its population, Australia has the biggest public-sector workforce in the ILO data, with 143 employees per 1,000 people—roughly 29% of the country’s workers. At the bottom of the ranking, Niger has just seven public-sector workers per 1,000 people. America’s rate is 64, exceeding Argentina’s but not Britain’s (see chart 1).

According to China’s official numbers, the government employment rate was 34 per 1,000 in 2023 (but the country’s statistics are notoriously ropy). In absolute terms that would make China’s 48m-strong public-sector workforce the biggest in the world. Data for India are even patchier, but estimates suggest that 25m people work in the public sector, or 21 per 1,000 people. In many countries public-sector employment has actually decreased relative to population. Between 2008 and 2023 America’s government workforce shrank by 8%, mostly because of outsourcing to contract workers.

Figuring out whether the public-personnel count affects the quality of government is even harder. The World Bank uses a composite measure to assess governments’ performance on a range of indicators, such as administrative quality (eg, perceptions of corruption) and programme delivery (eg, public satisfaction with infrastructure and education). By this measure Singapore has the world’s most effective government—unsurprising given its reputation for strict order and administrative discipline. Singapore also has a small bureaucracy. It has just 38 public-sector workers per 1,000 people, putting it in 42nd place in the ILO’s ranking.

Across all countries, however, our calculations suggest that the correlation between the number of government workers and efficiency actually swings in the opposite direction (see chart 2). Australia’s big government workforce, for example, is among the most effective. America ranks 11th. Unsurprisingly, poor countries, such as Haiti and Chad, have the weakest governments. But these places also tend to have small states.

In Argentina Mr Milei may have halved the number of ministries, but he has also shrunk the state in other ways. His chainsaw has cut the cost of procurement, administration and salaries by almost a third in real terms, resulting in a budget surplus. He has slashed red tape, liberating markets ranging from housing rentals to airlines. It is not hard to imagine that this has made the government more efficient, but the World Bank has not yet updated the data since Mr Milei took office.

In America, however, the sackings carried out by DOGE will probably make the government less effective. It has fired inspectors-general, whose job is to find fraud and waste. It has dismissed employees of the Food and Drug Administration, an agency that approves medical treatments, which will slow innovation. Firings at public-health agencies are driving employees mad. Some of the government’s top talent has resigned, and fewer talented people may see working in the public sector as an appealing career. DOGE has also cut private-sector contractors, but it is yet to find any meaningful savings for the federal budget.

Mr Musk and his friends are not wrong to strive for efficiency. There are countries with too many bureaucrats, and too much bureaucracy. But simply chopping headcounts does not make the government work better. ■