GOVERNMENT FINANCE STATISTICS
EXPENSE
Part 2
This lecture discusses how the Classification of the
Functions of Government (COFOG) is used in
classifying government outlays
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Copyright 2010, The World Bank Group. All Rights Reserved.
GOVERNMENT FINANCE STATISTICS
COFOG CLASSIFICATION OF OUTLAYS
The UN/OECD Classification of Functions of Government (COFOG)
provides a classification pertaining to outlays by governments on functions
that experience has shown to be of general interest and amenable to a wide
variety of analytic applications.
• In GFS, COFOG is used for the classification of government outlays,
which are defined as expense transactions plus transactions in nonfinancial
assets (net acquisition of nonfinancial assets).
• In GFS, COFOG is a classification of transactions, it excludes other
economic flows or stocks.
• All outlays for a particular function are collected in one category of
COFOG regardless of how the outlays are implemented.
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Copyright 2010, The World Bank Group. All Rights Reserved.
GOVERNMENT FINANCE STATISTICS
COFOG DIVISIONS AND GFS CODES
COFOG Division
GFSM 2001 Code
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General public services
701
2
3
Defense
Public order and safety
702
703
4
Economic affairs
704
5
Environment protection
705
6
Housing and community
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Health
8
Recreation, culture, and
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Education
709
10
Social protection
710
amenities
706
707
religion
708
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Copyright 2010, The World Bank Group. All Rights Reserved.
GOVERNMENT FINANCE STATISTICS
GUIDANCE ON COMPILING COFOG STATISTICS
• Consumption of fixed capital may be difficult to allocate by function.
• Volume indicators should be used to split an item of government outlays
if it relates to more than one function.
• Foreign aid for environmental protection
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Copyright 2010, The World Bank Group. All Rights Reserved.
GOVERNMENT FINANCE STATISTICS
GUIDANCE ON COMPILING COFOG STATISTICS (cont’d)
• Fight against discrimination.
• Government support of sustainable energy.
• Water management.
• Schooling to help people find jobs.
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Copyright 2010, The World Bank Group. All Rights Reserved.
GOVERNMENT FINANCE STATISTICS
GUIDANCE ON COMPILING COFOG STATISTICS (cont’d)
• Retirement homes with nurses.
• Ambulance services operated by hospitals.
• Commodity reserves.
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Copyright 2010, The World Bank Group. All Rights Reserved.
GOVERNMENT FINANCE STATISTICS
GUIDANCE ON COMPILING COFOG STATISTICS (cont’d)
• Disinfestations.
• Lump sum received by some employees when retiring.
• Construction of stadiums for international events.
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Copyright 2010, The World Bank Group. All Rights Reserved.
GOVERNMENT FINANCE STATISTICS
COMPLETE CODING FOR COFOG HEALTH
707 Health
7071 Medical products, appliances, and equipment
70711 Pharmaceutical products
70712 Other medical products
70713 Therapeutic appliances and equipment
7072 Outpatient services
70721 General medical services
70722 Specialized medical services
70723 Dental services
70724 Paramedical services
7073 Hospital services
70731 General hospital services
70732 Specialized hospital services
70733 Medical and maternity center services
70734 Nursing and convalescent home services
7074 Public health services
7075 R&D Health
7076 Health n.e.c.
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GOVERNMENT FINANCE STATISTICS
COMPLETE CODING FOR COFOG
• Detailed description of the classification categories and principles for the
application of COFOG in GFS is provided in Annex to Chapter 6, Page 79 of
the GFS Manual:
http://www.imf.org/external/pubs/ft/gfs/manual/pdf/all.pdf
The history, methodology, and application of COFOG is covered in the
Eurostat Manual on sources and methods for the compilation of COFOG
Statistics, 2007 Edition:
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-RA-07022/EN/KS-RA-07-022-EN.PDF
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Copyright 2010, The World Bank Group. All Rights Reserved.
GOVERNMENT FINANCE STATISTICS
ANALYTIC USES OF COFOG
• COFOG permits trends in government outlays on particular functions or
purposes to be examined over time.
• COFOG is also used for making international comparisons of the extent
to which governments are involved in economic and social functions.
• COFOG can be used to distinguish between the individual and collective
services provided by general government.
• COFOG is also used in recording outlays in Millennium Development
Goals programs.
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Copyright 2010, The World Bank Group. All Rights Reserved.
GOVERNMENT FINANCE STATISTICS
CROSS-CLASSIFICATION OF FUNCTIONAL AND
ECONOMIC CLASSIFICATIONS OF EXPENSE
• A cross-classification of COFOG with categories of the economic
classification of expense provides a useful analysis for fiscal policy debate.
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Copyright 2010, The World Bank Group. All Rights Reserved.
GOVERNMENT FINANCE STATISTICS
COLLECTIVE AND INDIVIDUAL GOODS
Collective goods
Individual goods
In cash:
In cash:
Foreign aid transfers
Social cash transfers
General purpose and block grants
Interest
In kind:
In kind:
General governance services
Health
Basic research
Non-mkt recreation, cult. and religion
Defence
Education
Public order and safety
Social services
Infrastructure and network services
Market subsidies
Env. prot., dev. and com. services
Service regulation
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