Europe’s Most Depressing Chart

November 24, 2023 by Dan Mitchell @ International Liberty

Last month, I shared data on per-capita welfare spending in American states.

The big takeaway was that states such as New York and California were spending more tan twice as much as states such as Texas and Florida. And I concluded that “Florida and Texas presumably are reducing poverty while states such as New York and California are subsidizing it.”

Are there similar numbers for the entire world? Can we see which countries have the most redistribution spending, on a per-capita basis?

I did something like that in 2019, but the comparisons were based on social welfare spending as a share of economic output, not on a per-capita basis. And the data only covered industrialized nations.

My (admittedly cursory) online search did not unearth any comprehensive country-by-country data, but this a good opportunity to share data on the Europe’s welfare spending as a share of the world’s total.

Here’s a shocking graph from a 2012 World Bank report.

Keep in mind, as you look at this data, that Europe’s population is only about 10 percent of the world total.

This has to be Europe’s most depressing chart. People have quibbled about these numbers, and we also have to assume that there may have been some changes over the past 10 years.

But it’s a safe guess that any “improvement” in Europe’s numbers would be because other nations expanded redistribution, not because European government became more fiscally prudent.

The bottom line is that European welfare states are too burdensome and that won’t end well.

P.S. By some measures, the U.S. is more redistributive than Europe. But that’s only because so much redistribution in Europe is financed by huge tax burdens on lower-income and middle-class households.

P.P.S. The World Bank study cited above also had some powerful data on the harmful impact of excessive government spending.