Glossary:Government

General Government consists of all departments and agencies responsible for the administration of an economic territory (usually a country).

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

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.

The main functions of general government units are described in chapter 20 of ESA 2010 and 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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