Government spending per capita vs. Light regulation (Fraser)
Holds up after adjusting for income
Across 43 countries, Government spending per capita and Light regulation (Fraser) rise and fall together at r = +0.50 (on a scale from −1 to +1, where 0 means no link). Comparing only countries with similar income (GDP per person) flips the link to -0.20 (q = 0.027, allowing for the many pairs tested). The first figure pointed the other way only as richer and poorer countries differ.
Comparing countries across the middle half of light regulation (Fraser), 6.66 to 7.62 points, government spending per capita is $8,524 higher at the top of that range than the bottom. Comparing only countries with similar national income, the gap reverses, to $2,379 the other way.
Link before adjusting (r)+0.504p = 0.001 · 43 countries
After adjusting for national income-0.204p = 0.194 · likely range [-0.48, +0.11]
p, allowing for regions0.104standard error 0.097 · 5 regions
Check for luck (q)0.027across 17,292 pairs
How to read these.r runs from −1 (one goes up as the other goes down) to +1 (they rise together), and 0 means no link. Adjusting for national income means comparing countries with the same GDP per person, so differences in wealth can’t explain the link. Income is used in percentage terms, since an extra $1,000 means more to a poor country than to a rich one. p is how likely a link this strong would be if there were really none. Below 0.05 means it is unlikely to be chance. Very small values are written in short form: 1.1e-32 means a decimal point followed by 31 zeros and then 11, so very close to zero. The likely range is where the true figure probably lies, and a range that crosses zero means the link could easily be chance. Countries in the same region tend to resemble each other, so the third figure allows for that, which gives a fairer p. The standard error is the typical size of the error in r. Finally, testing this many pairs means some will look strong by luck alone. A q below 0.05 means this link is unlikely to be one of those.
Government spending per capita · current international dollarslink with income +0.92 · proxy
Light regulation (Fraser) · rating (0-10)link with income +0.64 · high
Both of these rise and fall closely with national income, so a strong link between them before adjusting was close to certain. Read the adjusted figure, not the first one.
“Link with income” is how closely each measure tracks GDP per person across countries, from −1 to +1.
Every country as a dot
best-fit line line after adjusting
Four ways to measure the link
| Method | r | p | Countries |
|---|---|---|---|
| Standard (Pearson), not adjusted | +0.504 | 0.001 | 43 |
| By rank (Spearman), not adjusted | +0.567 | 7.3e-5 | 43 |
| Standard (Pearson), adjusted for national income | -0.204 | 0.194 | 43 |
| By rank (Spearman), adjusted for national income | -0.211 | 0.179 | 43 |
The rank version uses only each country’s place in line, from lowest to highest, so a few extreme countries count for less. The adjusted and unadjusted versions use the same 43 countries: those that report both measures and GDP per person. So the gap between them comes from the adjustment, not from a change in which countries are counted. Drop in the size of r after adjusting: +0.299 (a minus sign means it grew).
How solid is it?
Leaving out one country at a time, r ranges from -0.269 (without TUR) to -0.140 (without LUX). The bar above shows that range on a scale from −1 to +1, with the solid line at the full result. The single country that moves r most: TUR (-0.064).
Within each region
Countries are not separate, unrelated cases, and neighbors share a lot. A link that holds inside each region is far more believable than one that shows up only when comparing regions.
| n | r | ||
|---|---|---|---|
| Europe & Central Asia | 30 | -0.13 |
By income third
If the link shows up only in the richest third of countries, it is a feature of rich countries, not a general pattern.
| n | r | ||
|---|---|---|---|
| Poorest third | 15 | +0.04 | |
| Middle third | 14 | -0.13 | |
| Richest third | 14 | -0.53 |
By largest religious group
Countries grouped by a label they share, such as main religion, rather than by a number. Groups of fewer than twelve countries are not shown. These groups differ in income, region and history all at once. So a gap between them is a place to start asking questions, not an answer.
| n | r | ||
|---|---|---|---|
| Christians | 35 | -0.28 |
By official ideology
Countries grouped by a label they share, such as main religion, rather than by a number. Groups of fewer than twelve countries are not shown. These groups differ in income, region and history all at once. So a gap between them is a place to start asking questions, not an answer.
| n | r | ||
|---|---|---|---|
| No strong official ideology | 38 | -0.31 |
By party system
Countries grouped by a label they share, such as main religion, rather than by a number. Groups of fewer than twelve countries are not shown. These groups differ in income, region and history all at once. So a gap between them is a place to start asking questions, not an answer.
| n | r | ||
|---|---|---|---|
| No parties banned | 41 | -0.20 |
Without outliers (countries far outside the middle half of countries on either measure, by more than one and a half times the width of that middle half): r = -0.140 after dropping 1 countries.
Two series, one country
Both measures over the years for one country you pick. The two charts are stacked so they share only the years along the bottom.
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Over time, within countries
Everything above compares countries with each other at one moment. This section compares each country only with itself over 18years. So a link here can’t come from anything about a country that stays the same, such as its history, geography, institutions or culture.
Within countries over time, there is no link that is clearly more than chance (r = -0.118, comparing each country only with itself over the years, and each year only with the same year elsewhere). Whatever the cross-country picture shows, countries whose government spending per capita moved did not tend to see their light regulation (Fraser) move with it.
Across countries (adjusted)-0.204for comparison
Within countries+0.022each country vs itself
…and vs the same year elsewhere-0.118q = 0.288 · 43 countries
Year-on-year changes-0.317q = 0.004
Read with care.
- Almost all of this indicator's variation is between countries, not within them, so the within-country estimate rests on a small part of the data.
757 country-years (one country in one year), 43 countries, 2007–2024, about 18 years each on average. Share of the variation that happens within countries over time: 10% for Government spending per capita, 24% for Light regulation (Fraser). The margins of error allow for each country appearing many times, and for each year’s value being close to the year before.
Year-to-year changes are a cautious test, not a final answer. Looking only at changes from one year to the next removes each country’s own trends. But it also makes measurement mistakes louder, which pulls the results toward zero. A near-zero result here is weak evidence of no link, not proof.
With one measure years behind the other
Same year (lag 0): -0.118. A peak away from zero does not show which comes first. These series change slowly — this year’s value is close to last year’s. That makes the curve smooth and nearly symmetric, whatever produced the data. Even a sharp peak at one lag (a gap of some years) would not prove that one measure changes the other.
The data
current international dollars | rating (0-10) | Years | |
|---|---|---|---|
| Luxembourg LUX | $72,957 | 7.63 | 2024 |
| Norway NOR | $50,329 | 6.96 | 2024 |
| Austria AUT | $41,817 | 7.05 | 2024 |
| Belgium BEL | $40,194 | 7.14 | 2024 |
| Iceland ISL | $39,385 | 7.73 | 2024 |
| Denmark DNK | $38,309 | 7.77 | 2024 |
| Netherlands NLD | $37,878 | 7.5 | 2024 |
| Finland FIN | $37,614 | 7.54 | 2024 |
| Germany DEU | $36,555 | 7.49 | 2024 |
| Sweden SWE | $35,854 | 7.23 | 2024 |
| France FRA | $35,798 | 6.91 | 2024 |
| United States USA | $34,073 | 8.48 | 2024 |
| Switzerland CHE | $32,409 | 7.6 | 2024 |
| Ireland IRL | $31,581 | 8.18 | 2024 |
| Italy ITA | $31,377 | 6.5 | 2024 |
OECD databases as named on each indicator: PISA, Social Expenditure Database (SOCX), Income Distribution Database, Development Assistance Committee statistics, Family Database, Government at a Glance, Corporate Tax Statistics, employment and environment statistics
Gwartney, J., Lawson, R., Murphy, R. and others, Economic Freedom of the World: 2026 Annual Report, Fraser Institute. Data from the EFW panel dataset (efotw-2026-master-index-data-for-researchers-iso.xlsx).
Sources
Government spending per capita
General government expenditure per capita
OECD · via Our World in Data · CC BY 4.0 (OECD terms and conditions) · updated annual, except the snapshots noted per indicator
All levels of government, in current dollars adjusted for what money buys in each country (purchasing power). So it grows over time with inflation as well as differing across countries. Where it is used for adjusting, it is measured in percentage terms (on a log scale), like income. Compared with national income, this measure answers a question nobody is asking. It is money per person set against money per person. So it moves with GDP per capita at about +0.86. Its development loading, which shows how much a measure just reflects how developed a country is, is +0.92. Rich countries spend far more per person because they have far more per person, and almost all of that figure comes from dividing by people. To ask whether government is a larger part of what a country has, you need a share of GDP, not an amount per head. Three measures here do that: government consumption, government expense and tax revenue. Against income those run +0.12, +0.29 and +0.32. That is a much smaller answer, and the real one.
Light regulation (Fraser)
Economic freedom, area 5, regulation (Fraser Institute)
Fraser Institute · No licence stated; used with citation · updated annual
Scores higher the lighter the rules on credit, labour and business: for example, how easy it is to start a business, hire and fire, or get a loan from a private bank, from 0 to 10. No "better" direction is set: how much to regulate is a political question.
How this was computed
Data used: most recent value in 2010-2025; values come from 2020–2024. To adjust for income, each measure is first predicted from GDP per person (in percentage terms, on a log scale) with a straight-line fit. Only what is left over is then compared. This is called a partial correlation. The line is drawn the standard way (ordinary least squares), which picks the line that comes closest to all the countries at once. The error margins allow for countries in the same region resembling each other, using 5 World Bank regions. The q-value corrects for testing all 17,292 pairs at once, using the Benjamini–Hochberg method. Underlying data last updated V-Dem v16; V-Party v2. How the country data works · explore Government spending per capita and Light regulation (Fraser)
This page shows that two measures go together. It does not show that Government spending per capita changes Light regulation (Fraser), or the reverse. These figures also describe countries, not individual people. See the ecological fallacy.
More links with Government spending per capita or Light regulation (Fraser)
- Light regulation (Fraser) vs Regulatory quality before +0.82 → after adjusting +0.71
- Light regulation (Fraser) vs Rule of law before +0.77 → after adjusting +0.61
- Government effectiveness vs Light regulation (Fraser) before +0.75 → after adjusting +0.59
- Control of corruption vs Light regulation (Fraser) before +0.75 → after adjusting +0.58
- Corruption Perceptions Index vs Light regulation (Fraser) before +0.75 → after adjusting +0.58
- Government expense vs Government spending per capita before +0.26 → after adjusting +0.56
- FDI inflows vs Government spending per capita before -0.48 → after adjusting -0.56
- Government spending per capita vs Small government (Fraser) before -0.69 → after adjusting -0.53