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- General government spending provides an indication of the size of government across countries. The large variation in this indicator highlights the variety of countries' approaches to delivering public goods and services and providing social protection, not necessarily differences in resources spent.
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Definition ofGeneral government spending. General government spending provides an indication of the size of government across countries. The large variation in this indicator highlights the variety of countries' approaches to delivering public goods and services and providing social protection, not necessarily differences in resources spent.
- Central government spending
Central government spending refers to central government's...
- Budgeting
The division monitors and analyses global trends and...
- Central government spending
In 2021, across OECD countries, general government spending per capita averaged USD 23 432 PPP, ranging from USD 5 637 PPP in Mexico to USD 56 357 PPP in Luxembourg. Between 2019 and 2021 spending per capita increased on average by USD 3 695 PPP.
- History of Government Spending
- Government Spending Across The World
- Composition of Government Expenditure
- Public Procurement
- What Is Linked with Government Spending?
Government spending in early-industrialised countries grew remarkably during the last century
The visualization shows the evolution of government expenditure as a share of national income, for a selection of countries over the last century. The source of the data is Mauro et al. (2015).1 If we focus on early-industrialized countries, we can see that there are four broad periods in this chart. In the first period, until the First World War, spending was generally low. These low levels of public spending were just enough for governments to be concerned with basic functions, such as main...
Public spending growth in early-industrialised countries was largely driven by social spending
The visualization above shows that government spending in early-industrialized countries grew substantially in the 20th century. The next visualization shows that this was the result of growth specifically in social spending. The steep growth of social spending in the second half of the 20th century was largely driven by the expansion of public funding for healthcare and education.
Total government spending
The next visualization maps recent estimates of central government expenditure, as a share of national incomes, across the world. The data is published as part of the World Development Indicators and comes from the IMF. The most striking feature in the chart is the degree of heterogeneity between world regions. Central governments in high-income countries – particularly those in Europe – tend to control a much larger share of national production than governments in low-income countries. Count...
Spending per person
The visualization shows total public expenditure per capita, across all levels of government. To allow for cross-country comparability, these estimates are expressed in current PPP US dollars. As we can see, cross-country differences are also large here. In India, the government spends a fraction per person than countries like Norway.
Governments differ substantially not only in size but also in priorities
The visualizations above show that governments around the world differ considerably in size, even after controlling for underlying differences in economic activity and population. Here we show that governments also differ substantially in terms of how they prioritize expenditures. The visualization shows the share of government expenditure that is specifically allocated to education. As we can see, there are large and persistent differences, even within developing countries. The education spe...
The proportion of government spending that goes towards social protection varies substantially across OECD countries
We have already pointed out that governments in high-income countries spend more resources than governments in low-income countries, both in per capita terms and as a share of their national incomes. More so, high-income countries also have higher levels of social spending than countries with lower average incomes.2 The chart here shows social protection expenditures as a share of total general government spending, across different OECD countries. As we can see, there are also large differenc...
How do OECD countries distribute their allocations to social spending?
In the chart here we see the allocation of public spending (given as the percentage of a country's GDP) across a range of 'social spending' branches. Note that you can change which country is shown. Although there are some differences across countries in how social expenditure is distributed, the three priorities are predominantly the same across the OECD. Old age expenditure (in the form of pensions and elderly care) typically receives the largest allocation of social spending, followed by h...
Procurement plays an important role in government expenditure
Governments around the world often rely on the private sector to produce and manage goods and services. The process through which governments purchase works, goods, and services from companies, which they have selected for this purpose, is often referred to as 'public procurement.' The visualization shows the importance of public procurement in OECD countries (and partner countries providing comparable data). It shows the value of total general government procurement as a percentage of GDP. A...
Procurement is more than subcontracting large infrastructure projects
Public procurement comprises many different forms of purchases. Public procurement includes, for example, tendering and contracting in order to build large infrastructural projects. However, public procurement goes beyond infrastructure. It also includes, for example, purchases of routine office supplies. Generally speaking, the part of public procurement that does not fall within the category of gross fixed capital formation (e.g. building new roads), is referred to as 'outsourcing', or 'con...
Procurement of infrastructure projects has grown substantially in low and middle-income countries
Public procurement strategies available to governments are varied. Governments may choose to take responsibility for financing, designing, building, and operating infrastructure projects – and they simply outsource specific elements. Or they may choose to pursue a public-private partnership, where private actors directly take responsibility for all these aspects, from financing to operation. The term 'private finance initiative' is often used to denote a public procurement strategy, whereby g...
Government spending correlates with national income
We have already pointed out that government expenditure as a share of national income is higher in richer countries. The visualization provides further evidence of the extent of this correlation. The vertical axis measures GDP per capita (after accounting for differences in purchasing power across countries), while the horizontal axis measures government spending as a share of GDP. The vertical axis is expressed by default in a logarithmic scale, so that the correlation is easier to appreciat...
Government spending is an important instrument for reducing inequality
The visualization shows the reduction of inequality that different OECD countries achieve through taxes and transfers. The estimates correspond to the percentage point reduction in inequality, as measured by changes in the Gini coefficientsof income, before and after taxes and transfers. Income 'before taxes' corresponds to what is usually known as market income (wages and salaries, self-employment income, capital and property income); while income after taxes and transfers corresponds to dis...
Government expenditures in OECD countries are primarily used to provide public services and transfer income across society. Government expenditures are usually less variable than their revenues, since they are less sensitive to economic upturns and downturns than taxes.
General government spending provides an indication of the size of government across countries. The large variation in this indicator highlights the variety of countries' approaches to delivering public goods and services and providing social protection, not necessarily differences in resources spent.
