Public expenditure is expenditure made by the State, social security administrations, local authorities and the administrations and bodies attached to them.
They can be classified into three main categories:
- operating expenses, which are used to ensure the smooth running of public services (current staff and maintenance costs, purchase of supplies, etc.);
- redistribution expenditure: cash benefits paid to households (e.g. retirement pensions, family allowances, minimum social benefits, etc.), subsidies paid to companies and households, etc;
- investment expenditure, which aims to renew or increase public productive capital (e.g. research and development expenditure, arms purchases, construction of buildings and infrastructure, etc.).