Our general election is three weeks away and the question posed in the headline of this week’s contribution may look very apt.

On the other hand, some might consider it a stupid question. It is obvious, no? Governments are elected to govern.

Governments are indeed elected to govern, however, the way that governance is exercised differs depending on one’s perspective.

I state upfront that my concern is exclusively the economy and not other aspects of Maltese life; reminding everyone of the (in)famous phrase used in Bill Clinton’s US presidential campaign in 1992: “The economy, stupid”.

Let us for the moment leave the local general elections aside and ask ourselves the question again. Traditional thinking is that we elect a government to achieve steady economic growth, price stability, full employment, equilibrium in the balance of payments and social justice. There is probably little to argue about here. What becomes arguable is the priority that we give each of these five public policy economic objectives. The paths that governments may choose to achieve these objectives will also differ. This gave rise to different economic strategies which have been given different labels.

Should governments leverage fiscal policy (that is working through public revenue and expenditure) to generate growth, or should they leverage monetary policy (that is work through the supply of money in the economy)? When designing fiscal policy, should governments adopt demand management policies (that is adopt a strategy that increases demand to generate growth) or should they adopt supply side policies (that is adopt a strategy that improves the productive capacity of the economy to generate growth)? More recently, we have had economic analysts arguing whether the way out of the recession is through a strategy of fiscal prudence or through a strategy that stimulates growth.

Is there a role model that one can follow? There was a time when the UK was seen as a leader. It was the time of Margaret Thatcher as Prime Minister. Thatcher was eventually pushed out of government by her own Conservative Party and many still consider her policies not to have been appropriate, even though they got the UK economy out of the doldrums they were in.

Very small states such as ours look at Singapore as a role model. On the other hand, many do not like the political cost at which economic growth was achieved in Singapore.

Nowadays, the Scandinavian countries seem to attract attention as an example to follow. Yet, as The Economist pointed out two weeks ago, even the governments of the Scandinavian countries appear to have conflicting strategies.

Whereas they have reduced taxation and have sought to reduce public spending (their tax-and-spend policies of the past had got them into trouble 20 years ago), they still have a social welfare network that is envied by many. Thus, whatever model we look at, one does not see perfection in any of them; which takes us to the original question: “What do we elect a government for?”

I would like to add my own thought to the issue through another question. Should governments seek to create wealth or to distribute wealth? I believe that although governments should seek to remove elements of unfairness in society, their primary objective is certainly not to distribute wealth.

History has several examples, where governments that have made the distribution of wealth as their primary objective eventually drove their economy to the ground. This happened because they forgot to create the wealth they wanted to distribute.

Moreover, once governments start thinking of distributing wealth, they forget about their obligation towards the common good and become the prey of sectoral interests.

We elect a government to create wealth and to create opportunities through appropriate education, health and social policies for that wealth to be enjoyed by the widest possible cross section of the population. A government that does not create wealth is not fit to govern.