There really is an equity-efficiency trade-off

We compare across OECD countries: The weight of public spending; Productivity gains; Income inequality after redistributive policies. We see that a high weight of public spending is associated with: Low productivity gains; But also low inequality after redistribution. So there is a clear equity-efficiency trade-off. Governments can give preference to efficiency or equity by choosing the weight of public spending. It is also possible to identify countries that are poorly placed in this trade-off, i.e. that have relatively low equity because of their preference for efficiency, or that have very low efficiency because of their preference for equity. Among countries that favour efficiency, this is the case of the United States, the United Kingdom and New Zealand; among those that favour equity, it is the case of Italy, France, Germany and Belgium.