States & Taxes
This week in POL 102, we’re discussing the state. As part of that discussion, students are looking at the 2012 Failed States Index.
One of the things I try to impress on my students is that the old adage “the government that governs least, governs best” is not necessarily true (ask a Somali refugee). The top ten “failed” states include a number of countries with little or no effective governance. One way to think about the positive attributes of states is to simply look at the relationship between state “strength” (operationalized by the Failed States Index) and “size of government” (operationalized as tax burden as a % of GDP, with data from the Heritage Foundation). The above graph shows that relationship.
The graph shows that states with smaller tax revenues tend to have higher Failed States Index scores. This simple statistical model explains about 36.5% of variation in the data (R2=0.36501), so the relationship is not particularly strong. The data reflects a representative sample of 62 countries. The orange dot represents the US.