Glossary:General government sector

From Statistics Explained

The general government sector has four subsectors:

  1. central government
  2. state government, among the reporting EU Member States and EFTA countries, this is only applicable in Belgium, Germany, Spain, Austria and Switzerland
  3. local government
  4. social security funds, social security funds are not separately reported in Ireland, Cyprus, Malta, the United Kingdom and Norway.

In the European system of accounts (ESA2010), paragraph 2.111 the general government sectors is defined as the general government sector (S.13) consisting

  • "of institutional units which are non-market producers whose output is intended for individual and collective consumption, and are financed by compulsory payments made by units belonging to other sectors, and institutional units principally engaged in the redistribution of national income and wealth."

In the European system of accounts (ESA95), paragraph 2.68, the sector "general government" has been defined as containing:

  • "All institutional units which are other non-market producers whose output is intended for individual and collective consumption, and mainly financed by compulsory payments made by units belonging to other sectors, and/or all institutional units principally engaged in the redistribution of national income and wealth".

Therefore, the main functions of general government units are :

  • to organise or redirect the flows of money, goods and services or other assets among corporations, among households, and between corporations and households; in the purpose of social justice, increased efficiency or other aims legitimised by the citizens; examples are the redistribution of national income and wealth, the corporate income tax paid by companies to finance unemployment benefits, the social contributions paid by employees to finance the pension systems;
  • to produce goods and services to satisfy households' needs (e.g. state health care) or to collectively meet the needs of the whole community (e.g. defence, public order and safety).

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