How Much Does Government Cost?

Richard Durana is the director of the Institute for Economic and Social Studies, a five-year-old pro-market think tank in the Slovak Republic. Durana's group studies a range of issues, from taxes to monetary policy to the health care system, with a particular interest in how services currently provided by the government could be delivered more efficiently by the private sector. To that end, it has launched "The Price of the State," an innovative Web-based project that offers comprehensive data on the cost of every government service, presented in a way that allows users to see how much each item costs each citizen.

In 2010 the project won a Templeton Freedom Award for Special Achievement by a Young Institute, an annual prize sponsored by the Atlas Economic Research Foundation that recognizes work at think tanks advancing the understanding of liberty. June Arunga interviewed Durana for reason.tv in November. For a video version of their conversation, go to reason.tv/video/show/richard-durana-interview.

Q: Why is it important to share this information with people who used to live under a communist regime?

A: Slovakia made quite a few successful economic reforms a couple of years ago, and as a result we were one of the fastest growing economies in the European Union for a couple of years. For instance, two years ago we grew over 10 percent. There were flat tax reforms. We did reform of health care and the pension schemes.

Obviously we are a post-communist country, so there is no tradition of thinking about the size of the government. This is what we are trying to explain to people—that the services that people believe are for free are not for free, and taxpayers pay for those services.

Q: Tell us about the program.

A: The project is called "The Price of the State," and it started as a single website. You can see their government revenues. You can see their government expenditures. It has complete information on public finance in my country, and there are a few interactive features.

For instance, there's a feature called "Buy Your Own State." You can click on whatever service provided by the state you prefer. And when you submit your shopping, the size of your state appears and also the information on how much taxes could be decreased if the state was according to your preferences.

Q: And under "Buy Your Own State," people can compare what the cost of buying certain services from the government is versus buying it from the private sector?

A: This is actually the aim of our project: to tell people that these services are really expensive. We are not trying to impose dogmatic positions. We are not telling people, "Government is big, and we have to limit it." Because once you tell people the explicit position, they just erect a barrier between you and them.

Q: You've managed to get it into the education system.

A: Yes, that was another step. We prepared the teaching tools for teachers, and we send this set of materials to all high schools and all universities around the country. 

And the response in general is very good. Teachers ask us to come to their schools and to deliver lectures—in other words, to show them how to present all this information on public finance.

Q: Are you seeing this kind of activity adopted by other countries?

A: Yes, and we are very happy. This project is spreading like a virus. Right now there is also "The Price of the State" for the Czech Republic and for Poland, so that people from these three countries—including Slovakia—can now compare how the individual governments are using and spending the money of the taxpayers, and what their preferences are. This is the way that we can create a sort of pressure for the effective use of the money of the taxpayers.