Korea’s Government Spending Highest Among OECD Members

A report showed that Korea’s government expenditure growth rate over the past ten years has been the highest among OECD members.

The Center for Free Enterprise released a report titled “Spending of OECD Nations” that says during the past 11 years, from 1994 to 2005, Korea has ranked first in government spending growth among the 26 OECD nations.

This figure, which is 3.2 percent higher than the nominal GDP growth rate of 8.16 percent of Korea, indicates that the government expenditures of Korea have increased at a much faster pace than the economic growth rate.

Meanwhile, during the same period, the annual fiscal spending growth rate of the other 26 OECD nations was 4.99 percent, lower than the 6.01 percent nominal GDP growth rate.

The data showed that major advanced nations, including the U.S., Germany, France and Japan, have adjusted their government expenditure levels lower compared to their economic growth rates. Only five nations, including Korea, Luxemburg, Switzerland, Ireland and Greece fell into the category in which fiscal spending growth rate surpassed their economic growth rate.

As for the state spending growth rate of past Korean administrations, the rate declined from 15.46 percent during Kim Yong-sam’s administration (1994-1997) to 9.1 percent during Kim Dae-jung’s administration (1998-2002) due to the financial crisis in 1997. It has risen 11.13 percent since Roh Moo-hyun’s administration took office in 2003.

Korea recorded a nominal GDP growth rate of 13.02 percent in the Kim Yong-sam administration, 6.86 percent in the Kim Dae-jung administration, and 5.64 percent in Roh’s administration. The government expenditure rate was especially higher than the economic growth rate in the incumbent administration.

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