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

CountryGovernment expenditure
(% of GDP)
1 Finland53.5
2 Belgium52.4
3 Denmark51.3
4 Kuwait49.4
5 Italy48.6
6 Sweden48.4
7 Norway48.0
8 Montenegro47.7
9 Lesotho46.5
10 Hungary46.5
11 Croatia46.4
12 Oman45.4
13 European Union44.7
14 Germany44.6
15 Cyprus44.5
16 Portugal43.5
17 Luxembourg43.1
18 Tonga43.1
19 Korea, South42.5
20 Netherlands42.1
21 Ukraine41.7
22 Poland41.5
23 Iceland41.5
24 Spain41.3
25 Bosnia and Herzegovina41.0
26 Serbia40.8
27 Canada40.7
28 Slovakia40.6
29 Czech Republic40.6
30 Slovenia39.5
31 Israel39.4
32 Estonia39.0
33 United Kingdom38.3
34 Palau38.2
35 Algeria38.1
36 Latvia37.6
37 Seychelles37.4
38 Japan37.1
39 Ecuador37.1
40 Malta36.8
41 New Zealand36.7
42 Australia36.7
43 Saudi Arabia36.6
44 United States35.1
45 Bulgaria35.0
46 Venezuela34.7
47 Turkey34.6
48 Kyrgyzstan34.1
49 China34.1
50 Namibia34.0
51 Bahrain33.7
52 South Africa33.4
53 Lithuania33.2
54 Uruguay33.2
55 Azerbaijan33.1
56 South Sudan32.8
57 Russia32.6
58  Switzerland32.4
59 Liberia32.4
60 Romania32.2
61 Iraq32.0
62 Bhutan32.0
63   Nepal31.9
64 Tajikistan31.9
65 Moldova31.6
66 Lebanon31.5
67 Trinidad and Tobago31.3
68 Botswana31.2
69 Mozambique31.2
70 Maldives31.0
71 Tunisia30.7
72 Egypt30.1
73 United Arab Emirates30.1
74 Morocco29.8
75 Qatar29.6
76 Jamaica29.4
77 Albania29.3
78 Niger29.2
79 Malawi29.1
80 Kosovo29.0
81 Vietnam28.8
82 Mongolia28.7
83 Zambia27.4
84 Nicaragua27.3
85 Mauritania27.1
86 Eritrea27.1
87 Afghanistan27.0
88 Rwanda26.7
89 India26.1
90 Mexico25.7
91 Uzbekistan25.7
92 Kenya25.5
93 Ireland25.3
94 Mauritius24.8
95 Togo24.7
96 Cambodia24.6
97 Puerto Rico24.3
98 Côte d’Ivoire23.8
99 Armenia23.5
100 Malaysia22.7
101 Congo, Republic of22.6
102 Papua New Guinea22.4
103 Burundi22.3
104 Senegal22.2
105 Philippines21.8
106 Panama21.7
107 Gambia21.6
108 Pakistan21.6
109 Thailand21.6
110 Sierra Leone21.5
111 Ghana21.5
112 Peru21.4
113 Myanmar20.4
114 Uganda20.1
115 Laos19.9
116 Angola19.7
117 Costa Rica19.7
118 Kazakhstan19.5
119 Haiti19.3
120 Paraguay19.0
121 Sri Lanka18.6
122 Cameroon18.5
123 Iran18.2
124 Taiwan17.9
125 Zimbabwe17.5
126 Indonesia16.6
127 Tanzania16.5
128 Comoros16.4
129 Madagascar16.3
130 Central African Republic16.3
131 Ethiopia16.1
132 Guinea15.7
133 Sudan15.1
134 Singapore14.6
135 Bangladesh14.3
136 Turkmenistan13.7
137 Chad13.3
138 Nigeria13.0
139 Guatemala12.3
140 Yemen12.1
141 Congo, Democratic Republic of11.2

Some smaller countries excluded.

Related

3 thoughts on “List of government spending as a % of GDP”

Comments are closed.

Item added to cart.
0 items - £0.00