Self-Sufficiency Subcomponent: Government Supports – Transfers to Households
Household transfers are a direct subsidy and have an especially high risk of undermining self-reliance. The policy highlights the tradeoff of enforcing a market-based system to maximize growth versus risking slower growth to achieve a different goal, like ensuring a social safety net for ethical reasons or for social stability. On this measure, we see that India’s and China’s governments are the least redistributive, by our measures. In both countries transfers to households are around 5% of GDP. Transfers in the US and Japan are about four times larger, around 20% of GDP, but still much lower relative to the rest of the developed world. In Western Europe, transfers range from a bit under 25% to nearly 30% in France.