Evaluating Government Employment and Compensation by Benedict Clements, Sanjeev Gupta, Izabela Karpowicz, and Shamsuddin Tareq published by IMF (9/2010).
Government compensation as a share of GDP and as a share of total government spending. It is often useful to compare government compensation of employees as a share of GDP and total government outlays with regional averages and with countries at similar levels of development. There are distinctive patterns across country groups (Table 1). For example, as a share of GDP, general government compensation of employees is highest in Europe (10 percent of GDP) and lowest in Asia and the Pacific (6½ percent of GDP). The wage bill tends to be a higher ratio of GDP in high- and middle- income countries than in low-income countries. Fragile states tend to have a higher ratio than other low-income countries. The share of total spending absorbed by compensation of employees ranges from a fourth of general government outlays (Europe, Asia and the Pacific) to a third (Africa, Middle East and Central Asia, and the Western Hemisphere). There are also variations in spending across levels of government, reflecting differing degrees of fiscal decentralization. In Europe, for example, the central government accounts for just over half of total general government spending on compensation.
