Government and household spending linked
Comparing Households and NPISHs Final consumption expenditure (current LCU), per unit of GDP with General government final consumption expenditure (current LCU), per unit of GDP across 184 countries, 2004–2025.
- Rank correlation
- +0.97
- Holding size constant
- +0.97
- Countries compared
- 184
- Period
- 2004–2025
What might link these
The strong correlation between government and household consumption expenditure might be driven by a country's overall economic conditions, with a likely confounder being the country's income distribution. A careful reader should consider that this relationship could be influenced by various factors, including cultural and social norms. The similarity in expenditure patterns could also be a result of shared economic policies or historical context.
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. This correlation could mislead by implying a direct causal relationship between government and household spending, when in fact it may be driven by underlying economic or demographic factors.
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.