2.
PUBLIC FINANCE AND ECONOMICS
Revenue and expenditure structure by level of government
Depending on their administrative structure, central, state
and local governments have greater or less autonomy over
revenue collection. In 2019, central governments in OECD
countries collected on average slightly more than half
(53.3%) of general government revenues, state governments
collected 21.1%, social security funds 16.2% and local
governments 9.1% (Figure 2.30).
Between 2007 and 2019, the composition of revenues in
OECD countries changed moderately: on average, central
governments’ share of revenue increased by 0.2 p.p. and
state governments’ by 1.7 p.p. The share fell for local
governments (1.4 p.p.) and social security funds (0.5 p.p.)
(Online Figure G.21). Between 2019 and 2020, among
OECD-EU countries, central governments’ share increased
by 0.9 p.p., local governments’ by 0.1 p.p., while state
governments’ share fell 0.2 p.p. and social security funds’
share by 0.8 p.p. These changes need to be understood in
context: government revenues overall fell in 2020 due to
the COVID-19 pandemic.
Different levels of government are responsible for different
functions. For example, central government is usually
responsible for foreign affairs and defence, while local
governments often provide education and health services.
However, different administrative systems allocate
spending responsibilities differently and grant more or
less autonomy over how resources are used. There are also
several government functions that require coordination
across governmental levels and that are amenable to
different funding arrangements. In 2019, on average,
central government carried out 41.3% of public expenditure
in OECD countries, state and local governments 38.8%, and
social security funds 19.9% (Figure 2.31).
Between 2007 and 2019, the balance has tilted towards
social security, albeit with wide variations across countries:
on average, the share of social security fund expenditure
increased by 1.2 p.p. and central government increased by
0.3 p.p., while sub-central government fell by 1.5 p.p (Online
Figure G.22). Between 2019 and 2020, in OECD-EU countries,
central government spending increased most (1.2 p.p.) with
a slight increase for state governments (0.1 p.p.). These
levels have been responsible for most of the financial aid
aimed at alleviating the economic effects of the pandemic.
Methodology and definitions
Revenues and expenditures data are derived from
the OECD National Accounts Statistics (database), which
are based on the System of National Accounts (SNA), a
set of internationally agreed standards for national
accounting. The 2008 SNA framework has been
implemented by all OECD countries (see Annex A for
details). In SNA terminology, general government
92
consists of central, state and local governments, and
social security funds. State government only applies
to the nine OECD countries that are federal states:
Australia, Austria, Belgium, Canada, Germany, Mexico,
Spain (deemed a quasi-federal country), Switzerland
and the United States. Data exclude transfers between
levels of government except in Australia, Korea,
Turkey, Costa Rica and Indonesia. This is in order to
see the contribution of each sub-sector to general
government total revenues and expenditures, which
are consolidated at this level.
Revenues include taxes (e.g. on consumption, income,
wealth), net social contributions (e.g. contributions to
pensions, health and social security), sales of goods
and services (e.g. market output of government
establishments) and grants and other sources (e.g.
current and capital grants, property income, and
subsidies). The aggregates were constructed using
sub-account items (see Annex B). Expenditures
include intermediate consumption, compensation
of employees, subsidies, property income (mainly
interest spending), social benefits, other current
expenditures (mainly current transfers) and capital
expenditures (i.e. capital transfers and investments).
Further reading
Kim, J. and S. Dougherty (eds.) (2020), Ageing and Fiscal
Challenges across Levels of Government, OECD Fiscal
Federalism Studies, OECD Publishing, Paris, https://doi.
org/10.1787/2bbfbda8-en.
Vammalle, C. and I. Bambalaite (2021), “Funding and
financing of local government public investment: A
framework and application to five OECD Countries”,
OECD Working Papers on Fiscal Federalism, No. 34, OECD
Publishing, Paris, https://doi.org/10.1787/162d8285-en.
OECD (2020), Pilot Database on Regional Government Finance
and Investment: Key Findings, OECD Publishing, Paris,
www.oecd.org/cfe/regionaldevelopment/REGOFI_Report.pdf.
Figure notes
Data for Chile and Colombia are not available. Data for Turkey are
not included in the OECD average due to missing time series.
Flows between levels of government are excluded (apart from
Australia, Korea, Turkey, Costa Rica and Indonesia). For Japan data
for sub-sectors of general government refer to fiscal years and are
for 2018 rather than 2019. Local government is included in state
government for Australia and the United States. Australia does not
operate government social insurance schemes. Social security funds
are included in central government in Ireland, New Zealand, Norway,
the United Kingdom and the United States.
G.21 and G.22. (Changes in the distribution of revenues and expenditures
by levels of government, 2007 to 2019) are available online in Annex G.
Government at a Glance 2021 © OECD 2021
 0
10
20
30
40
50
60
70
80
90
100
%
0
10
20
30
40
50
60
70
80
90
100
%
IR IR
L 2019 L 2019
NZ 2020 GB 2020
L 2019 R 2019
GB 2020 2020
NZ
R 2019 L 2019
2020 2020
IS NO
R 2019 R 2019
NO 2020 2020
ES
R 2019 T 2019
TU 2020 2020
R IS
2019 R 2019
2020 M 2020
CZ
E 2019 EX 2019
2020 2020
ES IS
T 2019 L 2019
HU 2020 2020
DN
N 2019 K 2019
2020 2020

Central government
Central government

AU GR
S 2019 C 2019

Government at a Glance 2021 © OECD 2021

PR 2020 2020
LT
T 2019 U 2019
US 2020 2020
PR
A 2019 T 2019
2020 2020
IS LU

Source: OECD National Accounts Statistics (database).

Source: OECD National Accounts Statistics (database).
L 2019 X 2019
SV 2020 2020
N CZ
2019 E 2019
SV 2020 2020
HU
K 2019 N 2019
LU 2020 2020
AU
X 2019 T 2019
2020 2020
LV AU
A 2019 S 2019
KO 2020 2020
R TU
2019 R 2019
GR 2020 2020

State government
State government

NL
C 2019 D 2019
2020 2020
LT SW
U 2019 E 2019
M 2020 2020
EX 2019 SV
2020 K 2019
SW 2020
E 2019 IT
A 2019
AU 2020 2020
T 2019 US
2020 A 2019
FR 2020
A 2019 LV
A
2020 2019
PO SV 2020
L 2019 N 2019
DN 2020 2020
K 2019 PO
2020 L 2019
IT 2020
A 2019 BE
2020 L 2019
NL 2020

Local government
Local government

D 2019 FI
2020 N 2019
FI 2020
N 2019 KO
2020 R 2019
CA 2020
N 2019 ES
2020 P 2019
ES 2020
P 2019 JP
2020 N 2019
BE 2020
L 2019 CA
2020 N 2019
DE 2020
U 2019 FR
2020 A 2019
CH 2020
E 2019 CH
2020 E 2019
JP 2020
N 2019 DE
OE 2020 U 2019
OE 2020
OE CD 2019
CD 2020 OE CD 2019
-E CD 2020
U 2019 -E
2020 U 2019
2020
Social security funds
Social security funds
2.30. Distribution of general government revenues across levels of government, 2019 and 2020

CR
I 2019 CR
2020 I 2019
2.31. Distribution of general government expenditures across levels of government, 2019 and 2020

ID 2020
N 2019 RO
2020 U 2019
RO
ID 2020
U 2019 N
2020 2019

93
12 https://doi.org/10.1787/888934257204
12 https://doi.org/10.1787/888934257185
Revenue and expenditure structure by level of government
2. PUBLIC FINANCE AND ECONOMICS
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Government at a Glance 2021

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Please cite this chapter as:

OECD (2021), “Revenue and expenditure structure by level of government”, in Government at a Glance
2021, OECD Publishing, Paris.

DOI: https://doi.org/10.1787/0aa564d3-en

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