Net lending reflects the fiscal position of government after accounting for capital expenditures. Positive net-lending means that government is providing financial resources to other sectors and negative net-lending means that government requires financial resources from other economic sectors.

The accumulation of government debt is a key factor for the sustainability of government finance. Apart from net acquisitions of financial assets, changes in government debt over time reflect the impact of government deficits.

The responsibility for the provision of public goods and services and redistribution of income is divided between different levels of government. In some countries, local and regional governments play a larger role in delivering services, such as providing public housing or running schools. Data on the distribution of government spending by both level and function can provide an indication of the extent to which key government activities are decentralised to sub-national governments.

Governments spend money to provide goods and services and redistribute income. To finance these activities governments raise money in the form of revenues (e.g. taxation) and/or borrowing. The amount of revenues and expenditures per capita provide an indication of the importance of the public sector in the economy across countries. Variations across countries however can also reflect different approaches to the delivery of public services (e.g. such as the use of tax breaks rather than direct expenditures). Additionally, both revenues and expenditures are heavily influenced by economic fluctuations. The global financial crisis had a strong impact on government revenues and expenditures in many OECD countries.

Decisions on the amount and type of goods and services governments produce, as well as on how best to produce them, are often political in nature and based on a country’s social and cultural context. While some governments choose to outsource a large portion of the production of goods and services to non-governmental or private entities, others decide to produce the goods and services themselves.

Growing needs to restore trust, as well as expectations of open and fair public decision making, increase pressure on governments to ensure that official decisions are not affected by private interests. A conflict of interest arises when a public official’s private interests could compromise his or her performance. If not adequately identified and managed, conflict-of-interest situations could lead to corruption. At the same time, an excessively strict approach can be costly and unworkable, and may deter experienced and competent potential candidates from entering the public service.

Social expenditures are a measure of the extent to which countries assume responsibility for supporting the standard of living of disadvantaged or vulnerable groups.

Pension systems vary across countries and no single model fits all. Generally, there is a mix of public and private provision. Public pensions are statutory, most often financed on a pay-as-you-go (PAYG) basis – where current contributions pay for current benefits – and managed by public institutions. Private pensions are in some cases mandatory but more usually voluntary, funded, employment-based (occupational) pension plans or individual retirement savings plans (personal pensions).

Governments provide support to agriculture through a variety of means, ranging from budgetary transfers financed by taxpayers to policies such as border protection and administered pricing that, by raising farm prices above the levels that would otherwise prevail, are equivalent to a tax on consumers. While some of these measures may pursue commendable goals such as sustaining rural communities and encouraging more environmentally-friendly agricultural practices, they may also lead to production and trade distortions and environmental damage.

OECD governments provide financial support to the fishing industry, typically for the purposes of management, including surveillance and research. This financial support is important to ensure a sustainable and responsible fisheries sector.

Promoting economic and social development in Partner countries has been a principal objective of the OECD since its foundation. The share of national income devoted to official development assistance (ODA) is a test of a country’s commitment to international development. A long-standing United Nations target is that developed countries should devote 0.7% of their gross national income (GNI) to ODA.

Taxes on the average worker measure the ratio between the amount of taxes paid by the worker and the employer on the country average wage and the corresponding total labour cost for the employer. This tax wedge measures the extent to which the tax system on labour income discourages employment.

Total tax revenue as a percentage of GDP indicates the share of a country’s output that is collected by the government through taxes. It can be regarded as one measure of the degree to which the government controls the economy’s resources.