Government spending or government expenditure is classified by economists into three main types.

 

  • Government purchases of goods and services for current use are classed as government consumption.
  • Government purchases of goods and services intended to create future benefits, such as infrastructure investment or research spending, are classed as government investment.
  • Government expenditures that are not purchases of goods and services, and instead just represent transfers of money, such as social security payments, are called transfer payments.
government expenditure by function