List of government spending as a % of GDP

Countries with the highest government spending as a share of GDP.

top-government-spending-share-of-gdp The countries with the highest levels of government spending as % of GDP are predominantly Western Europe and Scandinavia in particular.

government-spending-smallest-share

The countries with the lowest government spending as a % of GDP tend to be poor developing economies.

The one notable exception is Singapore. A wealthy economy with an unusually low level of government spending as % of GDP.

(These graphs exclude some very small economies)

Quality of life index

quality-of-life-index
Source: Numbeo

(UK is ranked no. 17)

This quality of life index suggests a correlation between quality of life and countries with a high share of government spending as % of GDP.

Benefits of Higher government spending

Increased government spending enables

  • More public health care – an important factor in the quality of life. Good health care will also help improve life expectancy and labour productivity
  • More spending on education. Another important factor in the quality of life. Increased education spending can contribute to higher labour productivity and faster economic development
  • Provision of public goods, such as national defence, flood defences and protection of the environment
  • Welfare benefits – providing a minimum level of income and helping to reduce absolute and relative poverty.

Potential problems of government spending

  • Spending on military /defence may not lead to an increase in economic welfare but maybe a reflection of civil unrest.
  • Government spending may be prone to corruption
  • Government spending may be inefficient due to a lack of profit motive and incentives to be efficient.
  • Crowding out of the private sector. Higher government spending can crowd out private sector spending and investment.
  • Higher taxes may reduce incentives to work. Higher government spending needs higher tax revenue (or higher government borrowing. Higher taxes may create disincentives to work.

Does higher government spending improve real GDP per capita?

government-spending-vs-gdp-per-capita
Source: Our world in data

Generally, countries with higher real GDP per capita have higher levels of government spending as % of GDP. Some countries are non-typical, e.g. high real GDP of Middle East countries coming from oil and gas revenues.

There is a link but it is also important not to mix cause and effect. Economic growth generally enables an increase in public services.

government-spending-growth
Source: Our World in Data

Some economists claim that as the government sector grows in size in can hold back the rate of economic growth. (e.g. Rahn Curve)

 

Tax Revenue as a % of GDP

tax-burden-percent-gdp
Tax Burden OECD

Full list of Government spending as % of GDP

Country Government expenditure
(% of GDP)
1  Finland 53.5
2  Belgium 52.4
3  Denmark 51.3
4  Kuwait 49.4
5  Italy 48.6
6  Sweden 48.4
7  Norway 48.0
8  Montenegro 47.7
9  Lesotho 46.5
10  Hungary 46.5
11  Croatia 46.4
12  Oman 45.4
13  European Union 44.7
14  Germany 44.6
15  Cyprus 44.5
16  Portugal 43.5
17  Luxembourg 43.1
18  Tonga 43.1
19  Korea, South 42.5
20  Netherlands 42.1
21  Ukraine 41.7
22  Poland 41.5
23  Iceland 41.5
24  Spain 41.3
25  Bosnia and Herzegovina 41.0
26  Serbia 40.8
27  Canada 40.7
28  Slovakia 40.6
29  Czech Republic 40.6
30  Slovenia 39.5
31  Israel 39.4
32  Estonia 39.0
33  United Kingdom 38.3
34  Palau 38.2
35  Algeria 38.1
36  Latvia 37.6
37  Seychelles 37.4
38  Japan 37.1
39  Ecuador 37.1
40  Malta 36.8
41  New Zealand 36.7
42  Australia 36.7
43  Saudi Arabia 36.6
44  United States 35.1
45  Bulgaria 35.0
46  Venezuela 34.7
47  Turkey 34.6
48  Kyrgyzstan 34.1
49  China 34.1
50  Namibia 34.0
51  Bahrain 33.7
52  South Africa 33.4
53  Lithuania 33.2
54  Uruguay 33.2
55  Azerbaijan 33.1
56  South Sudan 32.8
57  Russia 32.6
58   Switzerland 32.4
59  Liberia 32.4
60  Romania 32.2
61  Iraq 32.0
62  Bhutan 32.0
63    Nepal 31.9
64  Tajikistan 31.9
65  Moldova 31.6
66  Lebanon 31.5
67  Trinidad and Tobago 31.3
68  Botswana 31.2
69  Mozambique 31.2
70  Maldives 31.0
71  Tunisia 30.7
72  Egypt 30.1
73  United Arab Emirates 30.1
74  Morocco 29.8
75  Qatar 29.6
76  Jamaica 29.4
77  Albania 29.3
78  Niger 29.2
79  Malawi 29.1
80  Kosovo 29.0
81  Vietnam 28.8
82  Mongolia 28.7
83  Zambia 27.4
84  Nicaragua 27.3
85  Mauritania 27.1
86  Eritrea 27.1
87  Afghanistan 27.0
88  Rwanda 26.7
89  India 26.1
90  Mexico 25.7
91  Uzbekistan 25.7
92  Kenya 25.5
93  Ireland 25.3
94  Mauritius 24.8
95  Togo 24.7
96  Cambodia 24.6
97  Puerto Rico 24.3
98  Côte d’Ivoire 23.8
99  Armenia 23.5
100  Malaysia 22.7
101  Congo, Republic of 22.6
102  Papua New Guinea 22.4
103  Burundi 22.3
104  Senegal 22.2
105  Philippines 21.8
106  Panama 21.7
107  Gambia 21.6
108  Pakistan 21.6
109  Thailand 21.6
110  Sierra Leone 21.5
111  Ghana 21.5
112  Peru 21.4
113  Myanmar 20.4
114  Uganda 20.1
115  Laos 19.9
116  Angola 19.7
117  Costa Rica 19.7
118  Kazakhstan 19.5
119  Haiti 19.3
120  Paraguay 19.0
121  Sri Lanka 18.6
122  Cameroon 18.5
123  Iran 18.2
124  Taiwan 17.9
125  Zimbabwe 17.5
126  Indonesia 16.6
127  Tanzania 16.5
128  Comoros 16.4
129  Madagascar 16.3
130  Central African Republic 16.3
131  Ethiopia 16.1
132  Guinea 15.7
133  Sudan 15.1
134  Singapore 14.6
135  Bangladesh 14.3
136  Turkmenistan 13.7
137  Chad 13.3
138  Nigeria 13.0
139  Guatemala 12.3
140  Yemen 12.1
141  Congo, Democratic Republic of 11.2

Some smaller countries excluded.

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