Public spending in international comparison: Where does Germany stand in comparison to its neighboring regions?

How much importance is attached to the welfare state? How important are education and national defense? How high are administrative expenditures and how much is being invested? Answers to these questions can be found in an international comparison of public spending.

This article examines how Germany's spending has developed overall and in various areas between 2001 and 2023. The Benelux countries, Austria/Switzerland, and the Nordic countries, which are relatively similar to Germany in terms of their economic development and cultural characteristics, are used as comparison regions. For various tasks, both the share of expenditure in total expenditure and expenditure relative to gross domestic product are considered.

The results show that for much of the 2010s, Germany's public spending ratio was still well below that of the Nordic countries, the Benelux countries, and the EU average. During the years of the coronavirus pandemic, however, these figures converged to a current level of just under 50 percent. The Austria/Switzerland group of countries is significantly below this at 43 percent.

At 41 percent of total expenditure, Germany currently spends more on social security than the comparison groups, and thus also more than the Nordic countries in particular. Almost half of these funds are allocated to old-age provision. In terms of healthcare expenditure, Germany ranks at the top alongside the Benelux and Nordic countries, accounting for 16 percent of total expenditure. The share of expenditure on general public administration (excluding government debt transactions) rose sharply in Germany to 11 percent, which is now also the highest figure. Expenditure on economic affairs (including transport) accounted for 12 percent in 2023. Germany is at the bottom of the ranking in terms of expenditure on education, with most recently 9.3 percent of total expenditure. Austria and Switzerland spend nearly 50 percent more.

Germany spent less on personnel than the comparison groups over the entire observation period, most recently accounting for 17 percent of total expenditure. Germany also ranked at the bottom of the field in terms of public investment over the entire observation period. Currently, 6.2 percent of total expenditure is used for investment.