In a number of other sections in this website, reference is made to the role of government.

Although the extent of government involvement varies widely between countries, there is a vital role for government in any system, whether it is an old command economy or the most laissez faire state, to ensure that activity can be conducted in an orderly and structured manner.

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How far governments go beyond the basic requirements, in terms of regulations, controls and ownership of the means of production, distribution and exchange is a political judgement which not only differs between countries, but changes over time within a country.

Even within the OECD area, countries with similar economic systems, there are big differences in the part played by national governments.

Table 10.1: General Government Expenditure (% of GDP)

  1970 1980 1990 2000 2008
France 37.2 45.6 49.6 51.6 52.5
Germany 39.1 47.9 44.5 45.1 43.5
United States 32.3 33.8 36.0 32.5 36.8
Japan 21.4 33.5 32.3 40.7 39.0
UK 41.5 47.4 41.5 36.9 45.8

Source: European Economy (European Commission, 2009)

Table 10.1: General Government Expensiture (% of GDP), shows one way of assessing the role of government, the share of GDP accounted for by public sector spending. The sharp rise in the government’s share of GDP is one of the most striking features of the table and the current downturn and banking crisis will give an extra twist to public sector involvement in most economies. This will be reflected in the statistics for 2009 onwards.

In this section, the overall scope of the government’s role in the UK economy is assessed. To avoid duplication, references are given to other sections in which a topic is covered in more detail.

The following pages pull together specialist themes that have been more fully developed elsewhere to give an overall picture of the size and range of activities in the UK that are the responsibility of government.