Glossary:General government sector

The general government sector by convention includes all the public corporations that are not able to cover at least 50 % of their costs by sales, and, therefore, are considered non-market producers. It has four subsectors:

1. central government
2. state government
3. local government
4. social security funds

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).

Further information

• Update of the SNA 1993 and revision of ESA95 (Background article)

Statistical data

• Government finance statistics