<p>There are numerous models of optimal government expenditure. You can have look at some standard textbooks such as Romer Advanced Macroeconomics ch 13 for overview of basic models and then follow references for more advanced versions.</p>
<p>You might want to also look at public economics literature where optimal tax and spending policy is discussed under different ideological frameworks. 'Promoting freedom' is bit vague, but I guess you can look at literature on optimal spending given classical liberal/conservative welfare criterion where welfare weights for all individuals are uniformly distributed, so you get minimum amount of government interference.</p>
<p>Also, note most of these models are representative agents models, so even though they do not explicitly state so, they can be de facto reinterpreted as per capita models.</p>

CC BY-SA 4.0
2023-10-08T19:47:53.647Z
Thanks for your answer. I looked at ADVANCED MACROECONOMICS, FOURTH EDITION, but there is no ch 13.  As for freedom, it is just one of the elements we need to look at. However, what is more important is the quality of life. Is there a model that takes this into account?
Denis Pageau-Sociétalogue
CC BY-SA 4.0
2023-10-08T23:32:40.017Z
@DenisPageau-Sociétalogue there is ch 13 in 5th edition. All these models take quality of life into account because in economics we focus maximizing welfare (utility).
1muflon1
CC BY-SA 4.0
2023-10-09T00:02:37.567Z
You wrote: "in economics we focus maximizing welfare (utility)" Thank you for this info. I was not familiar with this concept. This being said, it seems to be pretty subjective. "However, welfare economics is a subjective study that depends heavily on chosen assumptions regarding how welfare can be defined, measured, and compared for individuals and society as a whole."
Denis Pageau-Sociétalogue
CC BY-SA 4.0
2023-10-09T07:58:08.710Z
@DenisPageau-Sociétalogue it is subjective only in a sense that different people can have different preferences. It is objective in a sense that objectively every person derives more wellbeing from satisfying his/hers preferences. Hence if you want to maximize people’s wellbeing/quality of life you have to work within preferences people have. For example, if you provide nutritious meal for Muslim that has pork, even if the meal might be of high quality, you are not really improving that person’s wellbeing/quality of life, in fact you are likely worsening the wellbeing of that person.
1muflon1
CC BY-SA 4.0
2023-10-09T17:27:35.157Z
The example you give can be made objective. Instead of talking about  pork, you talk about having access to the necessary nutriments to be healthy for example.
Denis Pageau-Sociétalogue
CC BY-SA 4.0
2023-10-09T17:30:22.443Z
If you look at the tables above, 12 of th 15 highest HDI countries are part of the 25 countries whose government spend the most. Should we develop a spending model based on their results?
Denis Pageau-Sociétalogue
CC BY-SA 4.0
2023-10-09T20:15:55.130Z
@DenisPageau-Sociétalogue what kind of model? The reason why that is so is that countries with high GDP (income) also have high government spending. In turn high income (GDP) is literally one of the 3 components, and other 2 components (life expectancy and education) can be perfectly explained by high GDP also. This is also not novel observation, you are not first one to discover it, everyone knows it. HDI was originally supposed to be an more precise alternative proxy to wellbeing compared to GDP that used to be used as such proxy, but people discovered there is nearly perfect correlation
1muflon1
CC BY-SA 4.0
2023-10-09T20:17:32.157Z
between GDP and HDI and most scholars then just continued to use GDP as preferred measure as its more standardized and more widely available. Not really sure how can you build any novel model around it, as people get richer life gets better, that was always part of every economic model going back to even to early enlightenment. You can use virtually any econ model to explain relationship between income and wellbeing, generally, higher income allows you to satisfy more preferences than you can satisfy with lower income
1muflon1
CC BY-SA 4.0
2023-10-09T20:55:01.577Z
But GDP is a cold economic term. HDI has a warmer tone and makes a more direct connection with us humans. ;-)
Denis Pageau-Sociétalogue
CC BY-SA 4.0
2023-10-09T21:51:09.877Z
@DenisPageau-Sociétalogue yes you are of course right :)
1muflon1
CC BY-SA 4.0
2023-10-08T16:41:46.607Z
2023-10-08T16:48:11.117Z
2023-10-08T16:48:11.117Z
1muflon1
<p>In 1975 the world population reached 4 billion people.
In 2023 it reached 8 billion</p>
<p>In 1975 the US population was 211 million.
Today it is 340 million.</p>
<p>Considering that:</p>
<p>1- we now have more people, more knowledge and more technologies.
2- one important principle that we promote is freedom
3- there seems to be a positive correlation between Government spending and quality of life. (HDI = Human Development Index)</p>
<p><a href="https://i.sstatic.net/nr28t.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/nr28t.png" alt="enter image description here" /></a></p>
<p><strong>What amount of money per capita</strong> should our governments spend? Did someone develop a model of some kind.</p>

CC BY-SA 4.0
2023-10-09T18:09:20.157Z
You might want to look at government spending as a % of GDP, I think that would be more stable then government spending per person.
Daniel
<macroeconomics><government-spending><model>
PER CAPITA SPENDING - IS THERE A MODEL?
Denis Pageau-Sociétalogue
# PER CAPITA SPENDING - IS THERE A MODEL?

(Asked by: username_0 on 2023-10-08)

In 1975 the world population reached 4 billion people.
In 2023 it reached 8 billion

In 1975 the US population was 211 million.
Today it is 340 million.

Considering that:

1- we now have more people, more knowledge and more technologies.
2- one important principle that we promote is freedom
3- there seems to be a positive correlation between Government spending and quality of life. (HDI = Human Development Index)

[![enter image description here](https://i.sstatic.net/nr28t.png)](https://i.sstatic.net/nr28t.png)

**What amount of money per capita** should our governments spend? Did someone develop a model of some kind.

**Tags:** macroeconomics, government-spending, model

> **Comments:**
> **username_1**: You might want to look at government spending as a % of GDP, I think that would be more stable then government spending per person.  

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## 1 answers

### Answer by username_2 on 2023-10-08. Score: 0 | Accepted answer

There are numerous models of optimal government expenditure. You can have look at some standard textbooks such as Romer Advanced Macroeconomics ch 13 for overview of basic models and then follow references for more advanced versions.

You might want to also look at public economics literature where optimal tax and spending policy is discussed under different ideological frameworks. 'Promoting freedom' is bit vague, but I guess you can look at literature on optimal spending given classical liberal/conservative welfare criterion where welfare weights for all individuals are uniformly distributed, so you get minimum amount of government interference.

Also, note most of these models are representative agents models, so even though they do not explicitly state so, they can be de facto reinterpreted as per capita models.

> **Comments:**
> **username_0**: Thanks for your answer. I looked at ADVANCED MACROECONOMICS, FOURTH EDITION, but there is no ch 13.  As for freedom, it is just one of the elements we need to look at. However, what is more important is the quality of life. Is there a model that takes this into account?  
> **username_2**: @DenisPageau-Sociétalogue there is ch 13 in 5th edition. All these models take quality of life into account because in economics we focus maximizing welfare (utility).  
> **username_0**: You wrote: "in economics we focus maximizing welfare (utility)" Thank you for this info. I was not familiar with this concept. This being said, it seems to be pretty subjective. "However, welfare economics is a subjective study that depends heavily on chosen assumptions regarding how welfare can be defined, measured, and compared for individuals and society as a whole."  
> **username_2**: @DenisPageau-Sociétalogue it is subjective only in a sense that different people can have different preferences. It is objective in a sense that objectively every person derives more wellbeing from satisfying his/hers preferences. Hence if you want to maximize people’s wellbeing/quality of life you have to work within preferences people have. For example, if you provide nutritious meal for Muslim that has pork, even if the meal might be of high quality, you are not really improving that person’s wellbeing/quality of life, in fact you are likely worsening the wellbeing of that person.  
> **username_0**: The example you give can be made objective. Instead of talking about  pork, you talk about having access to the necessary nutriments to be healthy for example.  
> **username_0**: If you look at the tables above, 12 of th 15 highest HDI countries are part of the 25 countries whose government spend the most. Should we develop a spending model based on their results?  
> **username_2**: @DenisPageau-Sociétalogue what kind of model? The reason why that is so is that countries with high GDP (income) also have high government spending. In turn high income (GDP) is literally one of the 3 components, and other 2 components (life expectancy and education) can be perfectly explained by high GDP also. This is also not novel observation, you are not first one to discover it, everyone knows it. HDI was originally supposed to be an more precise alternative proxy to wellbeing compared to GDP that used to be used as such proxy, but people discovered there is nearly perfect correlation  
> **username_2**: between GDP and HDI and most scholars then just continued to use GDP as preferred measure as its more standardized and more widely available. Not really sure how can you build any novel model around it, as people get richer life gets better, that was always part of every economic model going back to even to early enlightenment. You can use virtually any econ model to explain relationship between income and wellbeing, generally, higher income allows you to satisfy more preferences than you can satisfy with lower income  
> **username_0**: But GDP is a cold economic term. HDI has a warmer tone and makes a more direct connection with us humans. ;-)  
> **username_2**: @DenisPageau-Sociétalogue yes you are of course right :)  

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