List of government spending as a % of GDP

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

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

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

(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?

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.

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

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.

• IMF WEO Oct 2019

Related

• GDP per capita