Cosmosophy: What was the percentage of government spending in the Soviet Union's GDP?

mardi 7 avril 2020

What was the percentage of government spending in the Soviet Union's GDP?

This is a difficult question, because of the reach of the Government in the USSR, its spending cannot be precisely defined. Communist countries did not use GDP as a measure - they used a concept of National Income which excluded some depreciation and most services. I'll take 1970 as a target because figures because it represents a "mature" period of the Soviet story, after the rapid growth of 1950 and before the distorting effect of the informal or black economy which grew quite rapidly afterwards.
Household consumption expenditure in 1970 is said to be 204.5 bn (US dollars) and Government consumptionthe same year 67.3 $bn, so approximately one quarter of the total consumption was by Government.(1) Government ultimately controlled the formation of capital but it might not seem fair to include that (in a Western accounting this would be private sector spending), but if we do, the proportion of Government influence over GDP rises to around half. (1)

In 1971 there were 1,935,000 higher administrative persons occupied in "organs of State and economic administration and organs of cooperative and public organisations" out of around 242 million, so the cost of running the executive could be guessed to be around 1% of the total. (2) Arguably we could add the cost of the Communist Party to that, but all of the admin was done by Party members anyway; few were directly paid by the Party and members were expected to volunteer for many functions and most apid dues that varied from 10 kopeks to 3 percent of salary, depending on the person's income.(7)

The State ran Military, Health services and Education. Western experts guessed the cost of the Soviet military from 12 percent to 20 percent of the gross national product, or 25-40% of the State budget. (3) Health may have been in the region of 2.5- 4.5% of GDP, ie 5-8% pf the total state budget. All health personnel were state employees. (4), (5). Education was said to be 6.8% of GNP in 1970 or % of Governemnt budget 12.8% as a percentage of Government expenditure. (6) (I've used this multiplier to adjust some of the former Government. expenditure percentages into GDP figures).

The proportion of the consumer sector was a lot smaller in 1970 at 47% than it was in 1990 at 60%. That shows that the numbers are very sensitive to time changes and should not be taken as written in stone.