OECD data highlight wide gaps in government spending across major economies

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OECD government spending gaps

Highlights

OECD data show France leads major economies in government spending at 57% of GDP, compared to 39% for the U.S. in 2023.
France allocates nearly 25% of GDP to social protection, double the U.S. rate of 12%, with Italy topping pension spending and France second.
U.S. public health spending exceeds that of universal-coverage European countries, despite sizeable differences in government service models and priorities.

OECD breakdown shows contrasting budget priorities

As reported by Financial Times, citing the OECD, internationally comparable expenditure data under the Classification of the Functions of Government, or COFOG, divide public spending into 10 categories, including defence, health, education and social protection. The framework is designed to improve like-for-like comparisons across countries despite the complexity and idiosyncrasies of government accounting.

The figures cited in the analysis show France spending 57% of GDP through the state, compared with 39% in the U.S. Among the countries highlighted, France sits at the top of general government spending as a share of GDP, while the U.S. ranks close to the bottom.

A large part of that gap appears to come from social protection. France allocates nearly a quarter of economic output to that category, while the U.S. spends 12%, according to the data discussed.

In 2023, Italy leads pension spending and France ranks second. Old-age and survivors' benefits in those countries run at roughly double the level seen in the UK and the U.S., while other social protection items, including unemployment, housing, family, children, sickness and disability benefits, appear comparatively limited in the U.S.

Health spending adds to debate over state role

Another notable contrast emerges in healthcare and education. The OECD numbers indicate that the U.S. government spends more on health than European governments that provide universal healthcare coverage, underscoring how higher public outlays do not necessarily map neatly onto differences in service models.

Debt service is not separately broken out in the cited presentation, but it represents a significant part of the "general public services" category, which also includes executive and legislative functions and other central government activities. That matters as the IMF warns that the world's leading economies need urgent action to rebuild public finances, increasing scrutiny on both the size and composition of budgets.

The comparisons do not resolve the broader political debate over what governments should prioritize, but they sharpen the contrast between competing models of the state. They also suggest that any effort to judge spending efficiency would need to weigh not just budget totals, but outcomes tied to pensions, healthcare, education and broader measures of well-being.

Our earlier article on a White House economic analysis examined projections that large-scale Democratic policy proposals could sharply increase U.S. federal debt and budget deficits over the next decade. It highlighted estimated knock-on effects ranging from higher Treasury and mortgage rates to weaker growth and household income pressures, with Medicare for All presented as a major cost driver in the assessment.

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