ABSTRACT
From 1950 to 1989, total government expenditure including all transfer payments to private households and firms increased by 7.6 per cent per year in Switzerland, while GNP rose by just 7.0 per cent, that is total spending relative to GNP increased from 19.6 to 25.0 per cent. In the Federal Republic of Germany, the respective figures were 24.0 per cent for 1950 and 29.3 per cent for 1989. Henceforth, the difference between the corresponding growth rates (1950 and 1989) was slightly lower in Germany compared to Switzerland, while the initial spending level (relative to GNP) was significantly higher in Germany. Breaking down government expenditure into central, cantonal or state and local level expenditure indicates that the government levels experienced quite different developments in the two federal countries, with regard to the magnitude and the time pattern of growth. Furthermore, different developments in both countries are becoming apparent when total spending is disaggregated into exhaustive (consumption and investment) expenditure and transfer payments.
