Government Spending: Total amount of government expenditure
Government Spending represents the total amount of expenditures by the government across various sectors and programs. It includes spending on infrastructure, social welfare, defense, and other public services. Monitoring this measure helps in understanding the allocation of public resources and the role of government in promoting economic growth and societal well-being.
The scoring system for government spending operates on a non-linear scale. Minimal spending is mildly penalized, while spending exceeding 3 percent of GDP results in significantly harsher scores, following a quadratic pattern. For instance, doubling the spending leads to a four-fold reduction in freedom. Scores of zero are only assigned to exceedingly high levels of government spending, such as exceeding 58 percent of GDP.
In January 2020, Yemen had the highest index value for government spending, with a score of 96.5. Nigeria followed closely in the second position with a score of 96.2, and Guatemala secured the third position with a score of 95.6. On the other hand, North Korea, Libya, and Micronesia received scores of zero, indicating exceedingly high levels of government spending.
Moving to January 2021, the Democratic Republic of the Congo (DR Congo) took the first position with a score of 96, followed by Yemen in the second position with a score of 95.6. Nigeria maintained its presence in the top three with a score of 95.3. Libya, Micronesia, and Timor-Leste received scores of zero.
In January 2022, Haiti secured the first position with a score of 97, followed by the DR Congo with a score of 95.7. Nigeria remained in the top three with a score of 95.3. Similar to previous years, North Korea, Micronesia, and Timor-Leste received scores of zero.
As of January 2023, Haiti maintained its first position with a score of 96.8, while Turkmenistan secured the second position with a score of 96.2. The DR Congo remained in the top three with a score of 95.2. Once again, North Korea, Micronesia, and Timor-Leste received scores of zero.
Monitoring the Government Spending index provides insights into the level of government intervention in the economy and its impact on economic freedom. It allows for comparisons between countries and highlights the varying degrees of public expenditure.