Public spending remains high across OECD countries, says survey

14 Jul 17

Government spending has risen across OECD countries since the global financial crash, according to the institute’s latest snapshot survey of public expenditure

Government at a Glance 2017 confirms that, despite financial consolidation, public spending averaged 40.9% of GDP in 2015, compared with 38.8% in 2007, before the crisis.


The average number of government jobs as a share of total employment has also risen, up from 17.9% in 2007 to 18.1% in 2015.


However, the biennial survey reveals important variations in public spending as a share of GDP.


France (56.5%), Finland (56.1%) and Denmark (53.6%) are the highest. Spending is lowest in Mexico (24.5%), Ireland (29.5%) and Korea (32.4%).

 

The share of government employment decreased the most in the UK and Israel between 2007-15, and rose the most in the Czech Republic, Estonia, Hungary, Slovenia and Spain.

 

Public confidence in national governments – down from 45% to 42% of citizens since the financial crisis – is lowest in countries affected by austerity measures.


The report notes that public debt remains persistently high across OECD countries, averaging 112% of GDP in 2015, compared with 72.9% in 2007.


However the average fiscal deficit has shrunk, from 8.4% of GDP in 2009 to 2.8% in 2015.


Despite low interest rates, there has been a steady decline in public investment, from 9.3% of spending in 2009 to 7.7% in 2015. The OECD argues that member countries should seek to correct this.


Government at a Glance points to progress in budgeting and performance frameworks, with a growing proportion of countries using spending reviews to control expenditure.


Three quarters of OECD countries have also improved their financial reporting by moving away from cash to accrual accounting.

 

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