Page 101 - Revista del Centro de Investigación y Desarrollo del INEI - Economía, Sociedad y Estadística N° 9

C. General government expenditure by economic others captures that since 2016 grants through the “free
transaction education” (gratuidad) make access to education more
equal, favouring the admission of vulnerable students
Governments spend their resources in various ways: (OECD 2018) .
5
by making transfers (e.g. subsidies and social benefits),
by purchasing goods and services (e.g. vaccines for
hospitals), by paying their employees, and by making
investments, among others. Disaggregating expenditures
by economic transaction allows disentangling
government priorities and commitments, as well as
its margin of manoeuvre for modifying the allocation
of public funds.

In 2017, LAC countries for which data are available
allocated 29.7% of their expenditures to social
benefits (e.g. pensions, conditional cash transfers).
This represents an increase of 9.2 p.p. since 2007.
By comparison, OECD countries spent 40.9% on this
transaction, a comparatively smaller increase (4.1 p.p.)
from 2007.

On average, in LAC, subsidies (e.g. on fuel, or electricity)
amounted to 1.6% of expenditures in 2017, down from
3.4% in 2007. Therefore, it is now slightly lower than
the share spent by OECD countries on this transaction
(2.0%). Chile reduced the share spent on subsidies from
22.2% in 2007 to 4.9% in 2017 and increased the share
on grants and other expenses from 5.9% to 25.7%. This
reflects a change in the system of transfers that among
2.8. GENERAL GOVERNMENT EXPENDITURE BY ECONOMIC TRANSACTION

TABLE 1: STRUCTURE OF GENERAL GOVERNMENT EXPENDITURES
BY ECONOMIC TRANSACTION, 2007 AND 2017
2.18. Structure of general government expenditures by economic transaction, 2007 and 2017
Percentage of total expenditures
Percentage of total expenditures
Compensation Intermediate Subsidies Property income Social benefits Grants + Other expenses Investments (gross)
of employees consumption (incl. interest) (current and capital)
2007 2017 2007 2017 2007 2017 2007 2017 2007 2017 2007 2017 2007 2017
Brazil 30.6 27.6 16.4 11.0 0.9 0.8 18.3 18.7 26.5 36.7 1.9 2.9 5.3 2.3
Chile 24.0 26.8 12.9 11.9 22.2 4.9 3.0 3.1 20.5 18.8 5.9 25.7 11.6 8.9
Colombia 21.3 18.7 17.6 26.8 1.2 1.3 10.5 9.5 19.6 25.6 16.6 9.9 13.2 8.1
El Salvador 38.2 40.4 15.8 16.3 2.8 1.5 11.1 10.9 10.5 10.6 10.3 11.6 11.2 8.6
Honduras 44.2 40.3 15.4 15.9 5.2 0.2 2.5 7.0 1.1 1.4 17.2 23.2 14.4 12.0
Mexico 21.6 22.2 7.7 9.9 7.4 3.6 10.2 12.9 9.7 18.7 35.3 26.6 8.1 6.1
Paraguay 47.6 42.3 11.1 10.5 0.0 0.0 4.3 3.2 16.3 19.5 8.1 8.7 12.6 15.8
Peru 29.4 29.9 24.5 27.9 0.0 0.0 9.8 5.2 14.4 9.3 6.8 9.2 15.1 18.5
LAC 27.2 26.0 14.2 12.7 3.4 1.6 14.5 15.3 20.5 29.7 12.8 10.0 7.3 4.6
OECD 24.1 22.8 14.6 14.1 1.9 2.0 7.8 6.5 36.7 40.9 5.6 6.0 9.3 7.7
Source: Data for the LAC countries: imF Government Finance Statistics (imF GFS) database. Data for the OECD average: OECD national Accounts
Source: Data for the LAC countries: IMF Government Finance Statistics (IMF GFS) database. Data for the OECD average: OECD National Accounts
Statistics (database).
Statistics (database).
Statlink https://doi.org/10.1787/888934091448
12 https://doi.org/10.1787/888934091448
2.19. Government expenditures by economic transaction as a percentage of GDP, 2017
Compensation of Employees Intermediate consumption Property income (incl. interest)
5 OECD (2018), OECD Economic Surveys: Chile 2018, OECD Publishing, Paris. http://dx.doi.org/110.1787/eco_ surveys-chl-2018-en.
Grants + Other expenses
Social Benefits
Subsidies
Investments (gross) (current and capital)
60
101
50

40

30

20

10

0
BRA COL HND CHL PRY SLV MEX PER LAC OECD
Source: Data for the LAC countries: Government Finance Statistics (imF GFS) database. Data for the OECD average: OECD national Accounts Statistics
(database).
12 https://doi.org/10.1787/888934091467

GOvErnmEnt At A GLAnCE: LAtin AmEriCA AnD thE CAribbEAn 2020 © OECD 2020 67