Government spending and economic output per person are strongly linked.
Comparing Gross value added at basic prices (GVA) (current US$), per capita with General government final consumption expenditure (current US$), per capita across 178 countries, 2011–2025.
- Rank correlation
- +0.97
- Holding size constant
- +0.95
- Countries compared
- 178
- Period
- 2011–2025
What might link these
Both indicators measure economic activity on a per capita basis. High government spending often fuels economic activity, and conversely, robust economic output can provide governments with greater resources for expenditure. However, this relationship is not necessarily causal and may be influenced by other underlying economic structures.
Why this is not proof of anything
This is a correlation across countries, not an experiment. It cannot show that either indicator causes the other, and both may simply follow a third thing. The high correlation might be amplified by shared underlying drivers of economic development and government capacity, rather than a direct relationship between expenditure and output.
The second figure above repeats the measurement with national population and income held constant. It is the more conservative number: a relationship that largely disappears there was mostly telling you that larger, richer countries have more of most things.
How this was measured
Both indicators were ranked across every country reporting each, and the two rankings compared — ranks rather than raw values, because a handful of very large countries can otherwise manufacture a relationship on their own. The calculation is arithmetic over figures already published on this site; the commentary above is drafted from the two indicator names and the resulting coefficients.