About the data
4.12
Definitions
Tables 4.12–4.14 present an overview of the size
data documentation. Because budgetary accounts
• Revenue is cash receipts from taxes, social con-
and role of central governments relative to national
may not include all central government units (such
tributions, and other revenues such as fines, fees,
economies. The tables are based on the concepts
as social security funds), they usually provide an
rent, and income from property or sales. Grants, usu-
and recommendations of the second edition of the
incomplete picture.
ally considered revenue, are excluded. • Expense is
International Monetary Fund’s (IMF) Government
Data on government revenue and expense are col-
cash payments for government operating activities in
Finance Statistics Manual 2001. Before 2005 World
lected by the IMF through questionnaires to mem-
providing goods and services. It includes compensa-
Development Indicators reported data derived on the
ber countries and by the Organisation for Economic
tion of employees, interest and subsidies, grants,
basis of the 1986 manual’s cash-based method. The
Co- operation and Development. Despite IMF efforts
social benefi ts, and other expenses such as rent
2001 manual, harmonized with the 1993 United
to standardize data collection, statistics are often
and dividends. • Cash surplus or deficit is revenue
Nations System of National Accounts, recommends
incomplete, untimely, and not comparable across
(including grants) minus expense, minus net acquisi-
an accrual accounting method, focusing on all eco-
countries.
tion of nonfinancial assets. In editions before 2005
nomic events affecting assets, liabilities, revenues,
Government fi nance statistics are reported in
nonfinancial assets were included under revenue
and expenses, not only those represented by cash
local currency. The indicators here are shown as
and expenditure in gross terms. This cash surplus
transactions. It takes all stocks into account, so
percentages of GDP. Many countries report govern-
or deficit is close to the earlier overall budget balance
that stock data at the end of an accounting period
ment finance data by fiscal year; see Primary data
(still missing is lending minus repayments, which are
equal stock data at the beginning of the period plus
documentation for information on fiscal year end by
included as a financing item under net acquisition
flows over the period. The 1986 manual considered
country.
of financial assets). • Net incurrence of liabilities
only the debt stock data. Further, the new manual no
is domestic financing (obtained from residents) and
longer distinguishes between current and capital rev-
foreign financing (obtained from nonresidents), or
enue or expenditures, and it introduces the concepts
the means by which a government provides financial
of nonfinancial and financial assets. Most countries
resources to cover a budget deficit or allocates finan-
still follow the 1986 manual, however. The IMF has
cial resources arising from a budget surplus. The net
reclassified historical Government Finance Statistics
incurrence of liabilities should be offset by the net
Yearbook data to conform to the 2001 manual’s for-
acquisition of financial assets (a third financing item).
mat. Because of reporting differences, the reclas-
The difference between the cash surplus or deficit
sified data understate both revenue and expense.
and the three financing items is the net change in
The 2001 manual describes government’s eco-
the stock of cash. • Total debt is the entire stock of
nomic functions as the provision of goods and ser-
direct government fixed-term contractual obligations
vices on a nonmarket basis for collective or individual
to others outstanding on a particular date. It includes
consumption, and the redistribution of income and
domestic and foreign liabilities such as currency and
wealth through transfer payments. Government
money deposits, securities other than shares, and
activities are financed mainly by taxation and other
loans. It is the gross amount of government liabili-
income transfers, though other financing such as
ties reduced by the amount of equity and financial
borrowing for temporary periods can also be used.
derivatives held by the government. Because debt
Government excludes public corporations and quasi
is a stock rather than a flow, it is measured as of
corporations (such as the central bank).
a given date, usually the last day of the fiscal year.
Units of government at many levels meet this defini-
• Interest payments are interest payments on gov-
tion, from local administrative units to the national
ernment debt—including long-term bonds, long-term
government, but inadequate statistical coverage pre-
loans, and other debt instruments —to domestic and
cludes presenting subnational data. Although data
foreign residents.
for general government under the 2001 manual are available for a few countries, only data for the central government are shown to minimize disparities.
Data sources
Still, different accounting concepts of central govern-
Data on central government finances are from the
ment make cross-country comparisons potentially
IMF’s Government Finance Statistics database.
misleading.
Each country’s accounts are reported using the
Central government can refer to consolidated or
system of common definitions and classifications
budgetary accounting. For most countries central
in the IMF’s Government Finance Statistics Manual
government finance data have been consolidated
2001. See these sources for complete and author-
into one account, but for others only budgetary
itative explanations of concepts, definitions, and
central government accounts are available. Coun-
data sources.
tries reporting budgetary data are noted in Primary
2012 World Development Indicators
261
ECONOMY
Central government finances