Big state resistance could yield the greatest rewards in the UK

A Wave of Government Reform

The challenge to big government is gaining momentum worldwide. It began with Argentinian President Javier Milei’s radical spending cuts, followed by U.S. President Donald Trump’s restructuring of federal agencies. More recently, UK Prime Minister Keir Starmer has joined the movement with promises to reduce bureaucratic obstacles.

Three Key Themes of Reform

The attacks on government institutions center around three main themes:

Fiscal Discipline – Reducing public spending and balancing budgets.
Ideological Overhaul – Eliminating perceived political bias in governance.
Governance and Accountability – Streamlining bureaucracy and increasing efficiency.

Each country’s approach prioritizes these themes differently.

Argentina’s Focus on Fiscal Austerity

Milei’s primary goal is to reduce Argentina’s reliance on budget deficits and inflationary financing. Public spending fell from 38% to 32% of GDP in 2024, eliminating the budget deficit for the first time since 2008. Financial markets responded positively, with the peso stabilizing and sovereign bond values rising.

The U.S. Emphasis on Ideological Reform

In the U.S., the focus is less on reducing spending and more on reshaping government ideology. Trump’s administration has introduced measures aimed at restructuring the civil service, banning Diversity, Equity, and Inclusion (DEI) programs, and increasing control over regulatory agencies. However, these changes have created uncertainty in financial markets, with the S&P 500 and the U.S. dollar experiencing declines.

The UK’s Push for Accountability and Efficiency

Starmer’s government is tackling governance and accountability, criticizing the inefficiency of numerous independent regulatory bodies. Recent actions include abolishing NHS England to bring healthcare back under direct government control. The future of other regulatory agencies remains uncertain. While Starmer condemns excessive oversight, his government has also moved forward with new independent bodies, such as a proposed soccer regulator.

The Future of Government Reform

Among the three approaches, the UK’s focus on governance and accountability may have the most significant long-term impact. While Argentina’s fiscal measures have improved investor confidence and the U.S. efforts are largely ideological, the UK’s pragmatic reassessment of government structures could offer a model for sustainable growth.

Investors and policymakers worldwide will be watching closely to see which of these approaches proves the most effective in reshaping government for the future.

“Big state resistance could yield the greatest rewards in the UK” “Big state resistance could yield the greatest rewards in the UK” “Big state resistance could yield the greatest rewards in the UK”