Ed Conway, Economics Editor

It is hard to think of many more dramatic eventualities in politics than a government simply shutting up shop.

But that is precisely what has just happened in the US, where the federal government has shut down all but its most essential functions.

Such shutdowns are hardly unheard of – every time Congress is unable to agree a budget (in this case the sticking point is over Republican immigration reform plans) the federal government runs the risk of a shutdown.

Indeed, this is the 18th such shutdown since 1976.

The last one, in 2013, lasted for 16 days, during which a swathe of activities, from the running of national parks to the publication of economic statistics simply stopped.

And to judge from much of the coverage, you might have assumed this would imply a wholesale economic disaster.

Indeed, the Office of Management and Budget has estimated that the last shutdown reduced economic growth by 0.2 to 0.6 percentage points in the final quarter of 2013, and stifled job creation by as much as 120,000 jobs.

However, what such estimates fail to mention is that usually the economy bounces back by about the same amount once the shutdown is over.

Workers being “furloughed”, and not receiving their pay, usually get it reimbursed in the following months, and any spending that was cut back during the shutdown simply happens a month or so later.

Shutdowns have little, if any, lasting impact on GDP, inflation, share prices or the US dollar. Look back a few years later and all it amounts to is a blip.

In other words, for all the fuss and disruption caused by those feuding politicians, there is little evidence that these shutdowns cause any lasting damage to the economy.

That begs a deeper question: how would our economies do without government? As it happens, we have a fair few examples from recent history.

For 10 months from 2015 to 2016, following a tight election and failed coalition talks, Spain tried and tried and failed and failed to establish a government.

A similar thing happened in Belgium, which was left without a government for 589 days after the 2010 elections.

In both cases, economists warned of an impending economic catastrophe unless a government was formed, and quick. So did both countries slump? Quite the opposite.

Spain enjoyed its strongest growth for years while Belgium outperformed many of its European counterparts.

Germany was left without a government for half a year following the collapse of the coalition in July 2005; it has been without a fully-functioning government since last year’s elections.

Neither episode seems to have caused a major dent in the economy. So why did these countries do so well despite the absence of government?

The explanation in Belgium’s case was that with no government, the country did not implement as much austerity as its fellow euro members (remember this was at the very peak of the euro crisis).

More government spending meant more growth, at least in the short term.

In Spain’s case, the country just so happened to be bouncing back from the crisis. The fact that there was no government there to ride the wave made no difference whatsoever.

It helped that in Belgium, Spain and Germany, there was a robust civil service to carry on the mechanisms of government in the absence of political masters – and relatively strong local and state government which carried on functioning.

But these episodes do raise an important question: might an economy actually grow faster without a government?

Unfortunately, to my knowledge, there are no comprehensive studies into this question – which is odd, given there is no shortage of examples (see above).

Common sense would tell you that provided there is a robust civil service to administer the functions of government – the implementation of law, collection of taxes, filling of potholes and so on – the absence of government need not be a major problem.

However, that depends, again, on the assumption that everyone is broadly happy with the direction of policy in the meantime.

The real issue would be if there were a financial crisis or a sudden breakdown in social order and no democratically-elected government to resolve it.

Such things matter – and not just in the US and mainland Europe.

Here in the UK, the Government, hamstrung by Brexit negotiations and its lack of a majority in Parliament, is passing fewer laws than any previous government since the post-war period.

In practice, if not formally, government has ground to a halt. Again, you might assume this would be disastrous for the economy, but the evidence is hardly clear-cut.

Sky Views is a series of comment pieces by Paste BN editors and correspondents, published every morning.

Previously: Paul Kelso - What they haven't told you about the NHS