All government spending is viewed as socialist
is a measure of government activity within an economy. It is usually calculated as the share of government expenditure in the gross national product at market prices (national product).
In socialist economics: relationship of state expenditures to the national product.
If one relates the total government expenditure (including social security) at market prices to the gross national product, the government quota results as an indicator of the overall economic activities of the government.
State share in the total gross national product. An increasing quota is usually a sign of the increasing influence of the state on the economic development of a country.
In economic sociology: share of public expenditure in gross national product. Information on the government quota may differ from one another due to different calculation bases.
Ratio of government expenditure to national product. If the total government expenditure, including that of social security, is related to the gross national product at market prices, the result is the general government ratio, which is often viewed as an indicator of the overall economic activity of the government. Depending on the question, the total government expenditure can be broken down into sub-aggregates and related to the national product. The result is special government quotas (see table). The state quotas require careful interpretation: The general state quota does not, as is often claimed, mean that in 1989 the state claimed 44.9% of the gross national product. It must be taken into account that total government expenditure also includes transfer payments and subsidies, which are reflected in the figures for private consumption and private investments, but are not included in the calculation of the gross national product. The general government quota is therefore a spurious quota, since not all subsets of the numerator are included in the denominator. Although the state does not make use of the national product in the amount of the general state quota, it controls the financial flows. The part of the gross national product claimed by the state is expressed in the special state quota "expenditure on goods and services in relation to GNP" (1989: 20.8%). If one also takes into account that the state supply also includes intermediate consumption by the private sector (1989: 10.3%), then the services provided by the state itself account for 10.6% and private service provision for 89.4% of the gross national product. The development of the general state quota in the Federal Republic shows that the state share increased up to the mid-1970s / beginning of the 1980s. The increase results essentially from the inclusion of social security, the development of which has a significant impact on the increase in the general government ratio (see table). When assessing the state quotas, the following aspects must be taken into account: (1) They can only serve as an indicator of government activity that affects expenditure. The public tasks are also fulfilled through state standard-setting or laws and ordinances. (2) In order to achieve certain financial policy goals, expenditure and income can be used alternatively (example: subsidy expenditure versus tax breaks). Qualitatively similar financial policy activities can thus have an increasing and a decreasing effect on the government quota. (3) The change in the nominal government quota (shown here) does not mean an equal change in the real government quota. Insofar as the prices of the goods demanded by the state for the provision of public services (especially personnel and construction costs) rise more sharply than in the private sector and the productivity gains are comparatively lower, a disproportionate nominal increase in the state share would be necessary in order to maintain the same real state quota. For the long-term development of government activity, see Development Laws of Government Activities. Literature: Peffekoven, R., Public Finances, in: Vahlens Compendium of Economic Theory and Economic Policy, Vol. 1, 4th edition, Munich 1990, p. 475 ff.
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