Public spending and "wellness"

Study #1: Public and private spending vs life expectancy and participation rates

Summary

The following simple study examines OLS and Spearman stats for several variates taken from The Economist's Pocket World in Figures 1994. Along the lines of confirming basic fiscal theory, the regression models determined show that public consumption spending (as %GDP) is significantly and positively correlated with various metrics of "wellness" -- such as the UN's Human Development Index, employment, life expectancy, and GDP/capita.

On the other hand, private consumption spending (as %GDP) is negatively (sometimes weakly, sometimes in a statistically significant sense) or un-correlated with the same wellness measures. This might be regarded as along the lines of basic theory with respect to public spending -- e.g. "crowding out". Other views might also be relevant.

The size of the services sector (as %GDP) for countries in the dataset were also regressed against the wellness metrics. It was found they were significantly and positively correlated in all cases.

It should be noted that governments are "in the business" of providing services of various kinds.

More detailed discussion

Output from OLS program

Private consumption vs GDP/cap
Public consumption vs GDP/cap
Services vs GDP/cap
Services vs HDI
Public consumption vs HDI
Private consumption vs HDI
Private consumption vs employment (% population)
Public consumption vs employment (% population)
Private consumption vs foreign debt (% GDP)
Public consumption vs foreign debt (% GDP)
Private consumption vs life expectancy (male)
Public consumption vs life expectancy (male)
Public health spending vs life expectancy (male)
Services vs life expectancy (male)
Private health spending vs life expectancy (male)
Private consumption vs unemployment (% workforce)
Public consumption vs unemployment (% workforce)
Public consumption vs workforce (% 15-65 yo's)
Private consumption vs workforce (% 15-65 yo's)

Study #2: Public and private spending on health vs life expectancy

Datasets, raw output files and brief discussion