Financial systems and development

shown in these tables may not be strictly compara- Health covers public expenditure on hospitals,
ble across all economies.
maternity and dental centers, and clinics with a
Moreover, inadequate statistical coverage of major medical component; on national health and
state, provincial, and local governments dictates medical insurance schemes; and on family planthe
use of central government data; this may seri- ning and preventive care. Note that Table 10 proously
understate or distort the statistical portrayal vides a more comprehensive measure of expendiof
the allocation of resources for various purposes, ture on medical care, private as well as public,
especially in countries where lower levels of gov- relative to household consumption.
ernment have considerable autonomy and are re- Housing and community amenities and social security
sponsible for many economic and social services. and welfare cover expenditure on housing, such as
In addition, central government can mean either of income-related schemes; on provision and support
two accounting concepts: consolidated or budgetary. of housing and slum clearance activities; on com-
For most countries, central government finance munity development; and on sanitary services.
data have been consolidated into one overall ac- They also cover compensation for loss of income to
count, but for others only the budgetary central the sick and temporarily disabled; payments to the
government accounts are available. Since all cen- elderly, the permanently disabled, and the unemtral
government units are not included in the ployed; family, maternity, and child allowances;
budgetary accounts, the overall picture of central and the cost of welfare services, such as care of the
government activities is incomplete. Countries re- aged, the disabled, and children. Many expendiporting
budgetary data are footnoted.
tures relevant to environmental defense, such as
It must be emphasized that for these and other pollution abatement, water supply, sanitary affairs
reasons the data presented, especially those for ed- and refuse collection, are included indistinguishucation
and health, are not comparable across ably in this category.
countries. In many economies private health and Economic services comprise expenditure associeducation
services are substantial; in others public ated with the regulation, support, and more effiservices
represent the major component of total cient operation of business; economic developexpenditure
but may be financed by lower levels of ment; redress of regional imbalances; and creation
government. Caution should therefore be exer- of employment opportunities. Research, trade procised
in using the data for cross-country compari- motion, geological surveys, and inspection and
sons.
regulation of particular industry groups are among
Central government expenditure comprises the ex- the activities included.
penditure by all government offices, departments, Other covers items not included elsewhere; for a
establishments, and other bodies that are agencies few economies it also includes amounts that could
or instruments of the central authority of a coun- not be allocated to other components (or adjusttry.
It includes both current and capital (develop- ments from accrual to cash accounts).
ment) expenditure.
Total expenditure (as a percentage of GNP) is more
Defense comprises all expenditure, whether by narrowly defined than the measure of general govdefense
or other departments, on the maintenance ernment consumption (percentage of GDP) given
of military forces, including the purchase of mili- in Table 9, because it excludes consumption expentary
supplies and equipment, construction, re- diture by state and local governments. At the same
cruiting, and training. Also in this category are time, central government expenditure is more
closely related items such as military aid programs. broadly defined because it includes government's
Education comprises expenditure on the provi- gross domestic investment and transfer payments.
sion, management, inspection, and support of pre- Overall surplus/deficit is defined as current and
primary, primary, and secondary schools; of uni- capital revenue and grants received, less total exversities
and colleges; and of vocational, technical, penditure and lending minus repayments.
and other training institutions. Also included is Summary measures for the components of central
expenditure on the general administration and reg- government expenditure are computed from
ulation of the education system; on research into group totals for expenditure components and cenits
objectives, organization, administration, and tral government expenditure in current dollars.
methods; and on such subsidiary services as trans- Those for total expenditure as a percentage of GNP
port, school meals, and school medical and dental and for overall surpus/deficit as a percentage of
services. Note that Table 10 provides an alternative GNP are computed from group totals for the above
measure of expenditure on education, private as total expenditures and overall surplus/deficit in
well as public, relative to household consumption. current dollars, and GNP in current dollars, re-
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