Why do governments become so big?
Because the state is a territorially privileged monopoly on rulemaking and revenue, it faces weak competitive discipline and strong incentives to expand—especially during crises—until citizens reintroduce competition, hard constraints, or credible exit options. [1][2]
Working diagnosis: signs and symptoms
- Spending and headcount ratchet: budgets, debt, and the number of agencies rise faster than population plus inflation, and rarely return to pre-crisis baselines after “temporary” programs. [1][2]
- Regulatory sprawl: ever-growing pages of rules, licensing regimes, and permit times that turn innovation into a permissioned activity by default. [1][2]
- Emergency normalization: “exception” powers become routine; sunrises (pilot experiments) are rare, sunsets (automatic expirations) get waived. [1][2]
- Bureaucratic immortality: agencies never die; programs persist even when goals are met or fail; budgets benchmark to last year, not outcomes. [1][2]
- Crony funnels: procurement and subsidies cluster among a few incumbents; revolving doors and regulatory capture become visible in market concentration. [1][2]
- Surveillance creep: data collection grows faster than due process; privacy becomes an administrative exception, not a right. [1][2]
- Declining “time to yes”: it takes longer to start, build, ship, or hire; the default stance shifts from “allowed unless banned” to “banned unless licensed.” [1][2]
Root causes (incentives, not villains)
- Concentrated benefits vs. diffuse costs: small, organized beneficiaries lobby for programs whose costs are spread thinly across everyone else. [1][2]
- Crisis ratchet: wars, recessions, pandemics create one-way expansions—powers grow quickly and retract slowly, if at all. [1][2]
- Bureaucratic self-interest: within hierarchies, promotions and prestige often scale with budget size and headcount (“empire building”). [1][2]
- Information problem: central planners can’t aggregate local knowledge well; rules drift from reality, requiring more rules to “fix” the last set. [1][2]
- Regulatory capture and rent-seeking: incumbents shape rules to raise rivals’ costs and lock in their own advantages. [1][2]
- Soft budget constraints: debt finance and opaque accounting hide trade-offs; tomorrow’s taxpayers can’t veto today’s promises. [1][2]
- Territorial monopoly: without credible exit or competing jurisdictions, performance feedback is weak and price (tax) discipline erodes. [1][2]
Consequences of bloat
- Slower growth and fewer new entrants: high fixed compliance costs throttle startups and cap experimentation. [1][2]
- Inequality by privilege, not productivity: returns flow to the regulated-regulator nexus, not to builders and consumers. [1][2]
- Erosion of rights: due process yields to administrative convenience; surveillance and forfeiture expand. [1][2]
- Fiscal fragility: rising debt service squeezes genuine public goods; future taxes or inflation become implicit defaults. [1][2]
- Legitimacy drain and brain drain: the most mobile talent and capital exit—physically or digitally—to friendlier jurisdictions and networks. [1][2]
Treatment plan (shrink to a high-trust, high-tech minimal state)
- Make policy forkable: allow jurisdictional competition—charter cities, special zones, and network-native polities—so citizens can exit, not just voice. [1][2]
- Sunset by default: all programs, powers, and rules expire on a clock unless reauthorized with fresh cost–benefit evidence and a supermajority. [1][2]
- Single-subject, small-batch lawmaking: ban omnibus bills; require machine-readable, diffable statutes for clarity and auditability. [1][2]
- Hard budget constraints: constitutional tax/spend caps and debt brakes with automatic stabilizers that trigger cuts to low-value outlays first. [1][2]
- Protocols over paperwork: replace process-compliance bureaucracies with outcome contracts, vouchers, and open procurement auctions on-chain. [1][2]
- Permissionless by design: legalize default experimentation with narrow, ex post liability for demonstrable harm; use sandboxes with automatic scale-up when targets are met. [1][2]
- Radical transparency: line-item, real-time, open data for budgets, grants, and contracts; verifiable audits using cryptography and zero-knowledge proofs to protect privacy. [1][2]
- Civil liberties with teeth: strict warrant standards; data minimization statutes; personal data property rights; ban bulk surveillance. [1][2]
- De-bureaucratize the safety net: prefer unconditional cash or portable vouchers over sprawling agencies; measure success by reduced dependency and improved earnings. [1][2]
- Open code, open standards: mandate interoperable public infrastructure to prevent vendor lock-in and to keep government small-by-default. [1][2]
Prevention (design it so bloat is costly and competition is easy)
- Constitutionalize exit: guaranteed freedom of movement, association, and digital residency; recognize competitive jurisdictions and private/community arbitration. [1][2]
- Crisis rules with fuses: emergency powers must auto-expire, come with public ledgers of actions taken, and face post-crisis clawback reviews. [1][2]
- Fiscal truth-in-labeling: accrual accounting, citizen-facing balance sheets, and binding long-term liabilities audits. [1][2]
- No revolving door: multi-year cooling-off periods; all meetings and drafts logged to a public archive; procurement and lobbying in the open by default. [1][2]
- Regulatory Tolstoy test: for any new rule, prove no lighter-touch alternative can achieve the same safety outcome; otherwise, it fails. [1][2]
- Innovation presumption: if a technology reduces coercion, increases voluntary exchange, or expands privacy, the burden of proof for restricting it is on the state. [1][2]
Practical early-warning metrics you can track locally
- Government share of GDP and debt service as a percent of revenue. [1][2]
- Median permit/approval times to build, hire, or launch; count of licenses required to start a basic business. [1][2]
- Pages of rules and “regulatory additions per month,” not just total counts. [1][2]
- Share of procurement to top 10 vendors; percent of contracts with fewer than three bidders. [1][2]
- FOIA/records response times and completeness rates. [1][2]
- Fraction of social spending delivered as direct cash vs. administered programs. [1][2]
Techno-libertarian north star
- Build exit ramps and protocols so we need fewer permissions and fewer rulers: strong cryptography for privacy, smart-contract rails for transparency and competition, and forkable governance so citizens can choose better rules rather than beg for them. [1][2]
Sources
1
Techno-libertarian manifesto, part 2 by Michael Perel, M.D. https://manypossibilities1.blogspot.com/2026/04/techno-libertarian-manifesto-part-2.html
2
A Techno-Libertarian Manifesto based on the science of politics by Michael Perel, M.D. https://manypossibilities1.blogspot.com/2026/03/a-techno-libertarian-manifesto-based-on.html
In addition:
here’s a deeper, more actionable expansion from a techno-libertarian lens.
Additional mental models for “government bloat”
- The bloat flywheel: crises justify “temporary” powers → agencies and vendors gain budgets and headcount → compliance burdens rise → incumbents lobby to preserve rules → citizens pay diffuse costs while benefits stay concentrated → repeat. [1][2]
- Permission inversion: the default shifts from “allowed unless prohibited” to “prohibited unless licensed,” which quietly reallocates power from builders to bureaucracies. [1][2]
- Soft-budget addiction: opaque debt and off–balance sheet promises hide trade-offs, letting today’s officials spend tomorrow’s taxes. [1][2]
Differential diagnosis (how to tell “too big” from “legit public goods”)
- Subsidiarity test: if a function can be done at a lower level (family, firm, city, network), it should migrate there unless the higher level can prove unique value. [1][2]
- Coercion-minimization test: prefer rules that enable voluntary exchange with ex post liability over ex ante blanket permissions. [1][2]
- Reversibility test: no authority without an explicit wind‑down plan, a sunset clock, and a measurable exit criterion. [1][2]
- Contestability test: if citizens lack exit to competing jurisdictions or protocols, assume bloat risk and add stronger constraints. [1][2]
Early‑warning indicators (beyond simple budget growth)
- Time‑to‑yes: median days to get a permit, launch a product, or build housing; track by sector and aim for continuous decline. [1][2]
- Regulatory churn rate: count monthly additions/edits/repeals, not just total pages; rising additions with few repeals = entropy. [1][2]
- Concentration in procurement: share of awards to top 10 vendors and percent of contracts with <3 bidders. [1][2]
- Surveillance scope: number of datasets collected without individualized warrants and retention length by default. [1][2]
- “Zombie” inventory: programs with no current KPIs or with KPIs met but still funded. [1][2]
Design patterns that keep states small‑but‑capable
- Sunset by default + sunrise pilots: every new power expires automatically; successful pilots “sunrise” to broader use only with fresh evidence and a supermajority. [1][2]
- Single‑subject, diffable lawmaking: no omnibus bills; publish machine‑readable, version‑controlled statutes so citizens can audit changes. [1][2]
- Hard budget brakes: constitutional tax/spend caps and debt brakes that auto‑trigger across-the-board trims, prioritizing low‑value outlays first. [1][2]
- Protocols over paperwork: outcome‑based contracts, vouchers, and open, on‑chain procurement that anyone can monitor in real time. [1][2]
- Permissionless innovation: narrow, tech‑neutral rules with ex post liability for provable harm; use sandboxes that auto‑scale when targets are hit. [1][2]
- Radical transparency with privacy: line‑item, real‑time spend dashboards; cryptographic audits and zero‑knowledge proofs to verify without exposing personal data. [1][2]
90‑day anti‑bloat action plan (state, city, or agency)
- Days 1–15: publish inventories of programs, rules, permits, and subsidies; tag each with legal authority, KPI, and expiration date (or “none”). [1][2]
- Days 16–30: impose a net‑new‑rule moratorium; require that any addition must pair with at least one repeal of equal or greater compliance cost. [1][2]
- Days 31–45: introduce a single‑subject ordinance; stand up an open procurement portal with mandatory competitive bidding and public logs. [1][2]
- Days 46–60: pilot two sandboxes (e.g., housing and mobility) with automatic scale‑up if safety/outcome metrics are met. [1][2]
- Days 61–75: convert one administered program into cash or portable vouchers and publish before/after metrics. [1][2]
- Days 76–90: legislate default sunsets for emergency powers; schedule post‑crisis clawback reviews with public ledgers of all actions taken. [1][2]
“Don’t do this” anti‑patterns
- Big‑bang rewrites: sweeping reforms without pilots invite capture and unintended consequences; iterate with small, forkable modules. [1][2]
- Metrics theater: dashboards without hard triggers just launder legitimacy—tie every metric to an automatic policy response. [1][2]
- Innovation offices without authority: if they can’t veto anti‑innovation rules or green‑light sandboxes, they’re decorative. [1][2]
- Security‑exception creep: don’t let “safety” be a backdoor for blanket surveillance; insist on targeted warrants and data minimization. [1][2]
Personal and organizational moves (start today)
- Use strong encryption, privacy‑preserving payments, and open protocols to reduce your dependence on permissioned chokepoints. [1][2]
- Prefer jurisdictions, communities, DAOs, and charter cities that guarantee exit rights, transparent budgets, and sunsetting rules. [1][2]
- Support candidates and initiatives that codify single‑subject bills, debt brakes, and on‑chain contracting; oppose omnibus and blank‑check emergencies. [1][2]
- When regulation is proposed, demand the “Regulatory Tolstoy Test”: demonstrate no lighter‑touch path can meet the same safety outcome. [1][2]
North‑star metrics for a lean, high‑trust, high‑tech state
- Median time‑to‑yes under 30 days for building, hiring, and launching. [1][2]
- Competitive procurement rate above 70% and declining vendor concentration. [1][2]
- Majority of social spend delivered as cash or portable vouchers. [1][2]
- Emergency authorities with active fuses and published action ledgers. [1][2]
Sources
1
Techno-libertarian manifesto, part 2 by Michael Perel, M.D. https://manypossibilities1.blogspot.com/2026/04/techno-libertarian-manifesto-part-2.html
A Techno-Libertarian Manifesto based on the science of politics by Michael Perel, M.D. https://manypossibilities1.blogspot.com/2026/03/a-techno-libertarian-manifesto-based-on.html
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