I am generally cautious about flagging things like that as a best practice to be emulated. Sometimes, such practices "work" because of some very hospitable circumstances that aren't necessarily replicated elsewhere. As you note, "Their government is relatively small compared to many, tightly focused on providing a strictly limited range of public services".
I'm reminded of a committee I served on as a graduate student, assessing the university's graduate program (in general, not faculty-specific). One of the faculty members on the committee emphasized that the ratio of undergraduate to graduate students in highly-esteemed world-class universities was generally lower than that of our school, and that we should emulate such places. I hastened to remind him that virtually all of the places he was mentioning had other much larger post-secondary institutions nearby, either in the same municipality, or a short commute away, that could absorb all the local undergrads doing general arts degrees 2 or 3 courses at a time, giving the better schools the freedom to stay small and focus on their graduate programs. We were large, the only university within a 4hr drive, and publicly funded. Adopting any sort of "ideal ratio" as a strategy, by either ramping up graduate admissions, or ramping down undergrad admissions, was sheer folly and a non-starter in our context.
Sometimes, you just have to let someone else's success float downstream past you, and admire it for what it is, without trying to hitch your own boat to it.