<p>The data provided by Statista are estimates of public expenditure to GDP ratio for year 2017 while the Eurostat data are for year 2019. Consequently I do not see any a priori reason why the two series would be expected to match. They are not necessarily contradictory as they are for different years.</p>
<p>Furthermore, I can't see the information on Statista on the methodology/sources as it is hidden behind a paywall. It is quite possible that Statista's definition of public spending does not match the Eurostat definition of government expenditure. The definition provided by <a href="https://ec.europa.eu/eurostat/databrowser/view/tec00010/default/table?lang=en" rel="nofollow noreferrer">Eurostat</a> is:</p>
<blockquote>
<p>Final consumption expenditure by general government includes the value of goods and services purchased or produced by general government and directly supplied to private households for consumption purposes.</p>
</blockquote>
<p>Where general government is defined <a href="https://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:General_government_sector" rel="nofollow noreferrer">thusly</a>:</p>
<blockquote>
<p>of institutional units which are non-market producers whose output is intended for individual and collective consumption, and are financed by compulsory payments made by units belonging to other sectors, and institutional units principally engaged in the redistribution of national income and wealth.</p>
</blockquote>
<p>If you happen to know the Statista definition you can compare them.</p>

CC BY-SA 4.0
2020-10-13T10:40:48.340Z
Thank you for your answer. I edited my question to show why comparing different years is not too much of a problem. Mainly, I am trying to understand why people say that in EU, government spending is half of GDP, where the eurostat data shows twice less.
user288227
CC BY-SA 4.0
2020-10-13T10:49:14.600Z
@user288227 As the definition I provided in my answer says the government expenditure is defined as a consumption expenditure. If you look at total expenditure - which includes non consumption expenditure the EU government spending is about 50% of GDP. See [here](https://ec.europa.eu/eurostat/databrowser/view/gov_10a_main/default/table?lang=en).
1muflon1
CC BY-SA 4.0
2020-10-13T11:01:07.583Z
@user288227 also just recommendation for future if you are interested in something like this then please say so outright in your question next time because the original question wanted to just compare the two different statistics. If you would say that you dont understand why some sources cite that gov. spending is about half of GDP I could have directed you to the right aggregate right away
1muflon1
CC BY-SA 4.0
2020-10-13T11:33:25.903Z
Thanks for the advice. So when in politics, people say that government spending is half of GDP, implying that government spends too much, it is in fact misleading, since this government spending includes redistribution that doesn’t change the GDP, and investment in infrastructure that benefits the private sector too. Is that right?
user288227
CC BY-SA 4.0
2020-10-13T11:44:28.110Z
@user288227 I would not say it is misleading. In fact spending including redistribution is usually the number used to indicate the relative 'size' of state even in academic literature. Depending on what the context of debate is both numbers can be correct. Also note it is impossible to say that government spending is too much from either number. 1. in order to say that government spending is too much we have to have measure of what optimal gov. spending is. Why should 50% or even 99% be too much a priori. It might very well be that in order to ensure optimal provision of public goods...
1muflon1
CC BY-SA 4.0
2020-10-13T11:49:53.380Z
...spending gov spending should be above 50% (although note this is hypothetical - it is hard to estimate what the optimal provision of public goods is). 2. optimal gov. spending to GDP ratio will depend on peoples moral judgements. Suppose as a thought experiment that we would determine that gov. spending to GDP above 80% leads to collapse of economy and poverty. Well that might be completely fine for a monk from Franciscans order which emphasizes extreme poverty as a virtue. In such hypothetical 80% gov. exp. to GDP would be desirable. But, moral questions are beyond the scope of economics.
1muflon1
CC BY-SA 4.0
2020-10-13T11:53:45.253Z
Thank you for the clarification. I didn’t mean to imply that I condone this value judgment or the opposite one, just that the number is not representative of what people think (at least what I thought). In particular, the ratio of government spending by GDP doesn’t mean that half of spending is public, and the other half is private, because if transfers are counted in public spending, they might also appear in household spending or investments, and be doubly counted, generating a total >100%. Is that right?
user288227
CC BY-SA 4.0
2020-10-13T12:18:31.667Z
@user288227 yes social transfers are not recorded in GDP, although I would still say that does not mean they are not relevant. Spending to GDP is a **ratio**. Ratios that are above 1 are completely fine and meaningful. Also, it is completely valid to measure how much resources government directs (as transfers can be interpreted as government saying who should spend and economically it could be argued there is not much meaningful difference) and scale that as a GDP. This being said I am sure many people will misrepresent such statistics.
1muflon1
CC BY-SA 4.0
2020-10-13T12:22:23.387Z
Indeed, the GDP gives a meaningful scale of spending to compare ratios for different countries, and you are right to point out the difference between ratio and fraction. That’s what I mean. Thanks for the explanation, I know very little economics, and you clarified this issue for me.
user288227
CC BY-SA 4.0
2020-10-13T10:18:58.597Z
2020-10-13T10:33:27.487Z
2020-10-13T10:33:27.487Z
1muflon1
<p>I have found data that seems to be contradicting:
<a href="https://www.statista.com/statistics/263220/public-spending-ratio-in-eu-countries/" rel="nofollow noreferrer">statista</a> gives public spending at country level between 40% and 60%, but
<a href="https://ec.europa.eu/eurostat/statistics-explained/index.php/National_accounts_and_GDP#Gross_value_added_in_the_EU-27_by_economic_activity" rel="nofollow noreferrer">eurostat</a> gives an aggregate figure of about 20%, as shown in the following pie chart:
<a href="https://i.sstatic.net/DdN69.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/DdN69.png" alt="pie chart" /></a>
Which is it? Is there a difference in the definition of public spending and general government expenditure?
Edit: I am comparing different years, 2017 and 2019, but the percentage change of each category is relatively stable over the period, giving the same order of magnitude. <a href="https://i.sstatic.net/YFFsW.jpg" rel="nofollow noreferrer"><img src="https://i.sstatic.net/YFFsW.jpg" alt="percentage change" /></a></p>

<macroeconomics><gdp><government-spending>
What is the public spending / government expenditure share of GDP in Europe?
user288227
# What is the public spending / government expenditure share of GDP in Europe?

(Asked by: username_0 on 2020-10-13)

I have found data that seems to be contradicting:
[statista](https://www.statista.com/statistics/263220/public-spending-ratio-in-eu-countries/) gives public spending at country level between 40% and 60%, but
[eurostat](https://ec.europa.eu/eurostat/statistics-explained/index.php/National_accounts_and_GDP#Gross_value_added_in_the_EU-27_by_economic_activity) gives an aggregate figure of about 20%, as shown in the following pie chart:
[![pie chart](https://i.sstatic.net/DdN69.png)](https://i.sstatic.net/DdN69.png)
Which is it? Is there a difference in the definition of public spending and general government expenditure?
Edit: I am comparing different years, 2017 and 2019, but the percentage change of each category is relatively stable over the period, giving the same order of magnitude. [![percentage change](https://i.sstatic.net/YFFsW.jpg)](https://i.sstatic.net/YFFsW.jpg)

**Tags:** macroeconomics, gdp, government-spending


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## 1 answers

### Answer by username_1 on 2020-10-13. Score: 1 | Accepted answer

The data provided by Statista are estimates of public expenditure to GDP ratio for year 2017 while the Eurostat data are for year 2019. Consequently I do not see any a priori reason why the two series would be expected to match. They are not necessarily contradictory as they are for different years.

Furthermore, I can't see the information on Statista on the methodology/sources as it is hidden behind a paywall. It is quite possible that Statista's definition of public spending does not match the Eurostat definition of government expenditure. The definition provided by [Eurostat](https://ec.europa.eu/eurostat/databrowser/view/tec00010/default/table?lang=en) is:

> Final consumption expenditure by general government includes the value of goods and services purchased or produced by general government and directly supplied to private households for consumption purposes.

Where general government is defined [thusly](https://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:General_government_sector):

> of institutional units which are non-market producers whose output is intended for individual and collective consumption, and are financed by compulsory payments made by units belonging to other sectors, and institutional units principally engaged in the redistribution of national income and wealth.

If you happen to know the Statista definition you can compare them.

> **Comments:**
> **username_0**: Thank you for your answer. I edited my question to show why comparing different years is not too much of a problem. Mainly, I am trying to understand why people say that in EU, government spending is half of GDP, where the eurostat data shows twice less.  
> **username_1**: @username_0 As the definition I provided in my answer says the government expenditure is defined as a consumption expenditure. If you look at total expenditure - which includes non consumption expenditure the EU government spending is about 50% of GDP. See [here](https://ec.europa.eu/eurostat/databrowser/view/gov_10a_main/default/table?lang=en).  
> **username_1**: @username_0 also just recommendation for future if you are interested in something like this then please say so outright in your question next time because the original question wanted to just compare the two different statistics. If you would say that you dont understand why some sources cite that gov. spending is about half of GDP I could have directed you to the right aggregate right away  
> **username_0**: Thanks for the advice. So when in politics, people say that government spending is half of GDP, implying that government spends too much, it is in fact misleading, since this government spending includes redistribution that doesn’t change the GDP, and investment in infrastructure that benefits the private sector too. Is that right?  
> **username_1**: @username_0 I would not say it is misleading. In fact spending including redistribution is usually the number used to indicate the relative 'size' of state even in academic literature. Depending on what the context of debate is both numbers can be correct. Also note it is impossible to say that government spending is too much from either number. 1. in order to say that government spending is too much we have to have measure of what optimal gov. spending is. Why should 50% or even 99% be too much a priori. It might very well be that in order to ensure optimal provision of public goods...  
> **username_1**: ...spending gov spending should be above 50% (although note this is hypothetical - it is hard to estimate what the optimal provision of public goods is). 2. optimal gov. spending to GDP ratio will depend on peoples moral judgements. Suppose as a thought experiment that we would determine that gov. spending to GDP above 80% leads to collapse of economy and poverty. Well that might be completely fine for a monk from Franciscans order which emphasizes extreme poverty as a virtue. In such hypothetical 80% gov. exp. to GDP would be desirable. But, moral questions are beyond the scope of economics.  
> **username_0**: Thank you for the clarification. I didn’t mean to imply that I condone this value judgment or the opposite one, just that the number is not representative of what people think (at least what I thought). In particular, the ratio of government spending by GDP doesn’t mean that half of spending is public, and the other half is private, because if transfers are counted in public spending, they might also appear in household spending or investments, and be doubly counted, generating a total >100%. Is that right?  
> **username_1**: @username_0 yes social transfers are not recorded in GDP, although I would still say that does not mean they are not relevant. Spending to GDP is a **ratio**. Ratios that are above 1 are completely fine and meaningful. Also, it is completely valid to measure how much resources government directs (as transfers can be interpreted as government saying who should spend and economically it could be argued there is not much meaningful difference) and scale that as a GDP. This being said I am sure many people will misrepresent such statistics.  
> **username_0**: Indeed, the GDP gives a meaningful scale of spending to compare ratios for different countries, and you are right to point out the difference between ratio and fraction. That’s what I mean. Thanks for the explanation, I know very little economics, and you clarified this issue for me.  

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