This article provides a conceptual overview of how government activities, revenues, and expenditures are captured in a Social Accounting Matrix (SAM). It explains the relationship between government entities and other economic sectors, and helps users interpret the different data formats provided in the model.
The Government as the Center of Economic Activity
In a SAM, the government is not merely a regulator — it acts as a central hub for the circular flow of money. It functions simultaneously as a producer of services (such as defense and education), a consumer of private-sector goods, and an allocator of transfers.
To support granular analysis, the government is typically divided into three categories:
- Federal Government: focused on national defense and non-defense operations.
- State and Local Government: focused on regional services like education and hospitals.
- Government Enterprises: self-financing entities like public utilities and transit systems. Unlike core government accounts, enterprises operate on a quasi-commercial basis: they generate their own revenue from sales, and any operating shortfall or surplus shows up in the SAM as the Surplus-Subsidy of Government Enterprises line.
Core Government Activities
The government’s role breaks down into three primary conceptual flows:
- Production: The government produces “public goods” such as parks, schools, and roads. To do this, it hires labor (Employment) and buys commodities from the private sector (Operating Costs).
- Fiscal Management: The government collects revenue from households and corporations to fund its operations.
- Redistribution: The government moves money through the economy via social benefits and grants to maintain the social safety net. This includes direct transfers such as unemployment insurance, housing assistance, and pension payments to households, as well as grants to businesses and lower levels of government. These flows ensure that purchasing power reaches parts of the economy that markets alone would not serve.
Outflows: Where Does the Government Send Money?
The government’s outgoing payments, sometimes called remittances, represent the redistribution of tax dollars back into the economy:
- Households: Outflows take the form of social benefits (Social Security, welfare) and interest payments on public debt held by individuals.
- Labor (Factors): Wages and payroll for military and civil service employees.
- Other Government Levels: Known as Intergovernmental Transfers, these are flows where the Federal government sends funds to State/Local levels for regional projects (and vice versa in some cases).
- Enterprises: The government may send funds as subsidies or business transfers to support specific industries.
Government Revenue Streams Beyond Income Taxes
Income tax is a major government revenue source, but it isn’t the only one. In the IMPLAN taxonomy, income taxes themselves are split between Personal Tax, Income Tax (paid by households) and Corporate Profits Tax (paid by businesses). Beyond these, the government collects revenue through several additional mechanisms:
- Dividends: Collected when the government holds an equity stake in corporate entities or through specific state-managed investment funds.
- Social Insurance: Contributions from both employers and employees that fund specific social programs.
- Fines, Fees, and Licenses: Non-tax revenue collected from the public for administrative or regulatory actions.
- Rents and Royalties: Income generated from government-owned land or natural resources.
- Taxes on Production and Imports (TOPI): Sales taxes, excise taxes, property taxes, severance taxes, and special assessments. These are levied on transactions and assets rather than on income.
Transfers and Borrowing
Two terms are essential for interpreting the government rows and columns in a SAM:
- Transfers are non-exchange transactions. Unlike a commodity purchase (where you pay for a specific good), a transfer is a movement of money where no direct service is provided in return at the time of payment. A Social Security check sent to a retiree is the canonical example.
- Borrowing or Saving represents the financing gap between revenue and expenditure. When expenditures exceed revenue, this line shows borrowing from financial markets (a deficit). When revenue exceeds expenditures, it shows saving (a surplus). The line can run in either direction depending on the fiscal year.
A key property of any SAM is that it balances: for every account, total inflows (the row total) equal total outflows (the column total). The Borrowing or Saving line is one of the mechanisms that makes this balance hold for the government.
How to Pull the Detailed SAM in IMPLAN
The steps below walk through exporting the Detail IxC Social Accounting Matrix from IMPLAN and reshaping it into the pivot view described above.
Export the data from IMPLAN:
1. Log into IMPLAN.
2. Go to Regions.
3. Select United States (total).
4. Go to Region Details → Social Accounts → IxC Social Accounting Matrix.
5. Select Export Detail IxC Social Accounting Matrix.
Build the pivot in Excel:
1. Open the downloaded file in Excel and rename the worksheet Sheet1.
2. Go to Insert → Pivot Table and place it in a new worksheet. Rename that worksheet Sheet2.
3. In the pivot table field list, drag the following fields:
- Receiving Code into the Rows area.
- Transfer Description into the Rows area.
- Paying Code into the Columns area.
- Values into the Values area. (This may take a moment to populate.)
4. Save the file as .xlsx.
Data Breakdown: Two Ways to View the Same Flows
The model provides two ways to view government flows, depending on your analytical needs.
Sheet 1: The IxC Transaction List
A flat list of every individual "handshake" between two entities. Each row contains a payer, a receiver, and a specific transfer type. Unlike the matrix view, nothing is summarized or combined — every flow stands alone. This makes it the right choice for auditing a specific transaction, isolating one type of tax, or feeding data into external tools.
Sheet 2: The Matrix (Pivot View)
A large square grid representing the circular flow of the entire economy. Columns show who is spending money (Expenditures), and rows show who is receiving it (Receipts). This view is best for visualizing how a change in one sector — like a tax hike — ripples through every other sector.
The Government Row in SAM (Pivot View)
Once the pivot is built, the government rows reveal a hierarchical structure. Each agency category (electric utilities, passenger transit, education, hospitals, investment, and a catch-all “Other”) expands to show its individual flow types. Most of the fiscal action lives under State/Local Govt Other, which is where you’ll find the full range of revenue streams (income taxes, property taxes, sales taxes, social insurance contributions, dividends) alongside redistributive flows (intergovernmental transfers, business transfers, and the surplus-subsidy of government enterprises).
Expanded view of State/Local government rows in the IMPLAN pivot.
The categories visible here map directly to the conceptual flows described earlier:
- Production (Commodity Make, Commodity Trade)
- Fiscal management (the various tax line items)
- Redistribution (transfers and benefits)
Glossary of Terms
| Term | Meaning |
| Borrowing or Saving | The line that balances government revenue against expenditure. Negative values indicate borrowing (deficit); positive values indicate saving (surplus). |
| Business Transfers | Payments from government to businesses that are not in exchange for goods or services, such as certain subsidies. |
| Commodity Use | The government purchasing goods or services from the private sector. |
| Factor Receipts | The payment of wages and salaries to government employees. |
| Intergovernmental Transfers | Money moving between federal, state, and local agencies. |
| IxC | Industry-by-Commodity; — the structural format IMPLAN uses to organize its accounts. |
| OPI | Other Property Income; — income from capital ownership (interest, profits, rents). “OPI: Corporate Profits Tax” refers to the tax levied on this category. |
| Remittance | An outgoing government payment to another sector of the economy. |
| Social Benefits | Direct redistribution payments from government to households (e.g., Social Security, welfare). |
| Social Insurance | Contributions from employers and employees that fund specific social programs. |
| TOPI | Taxes on Production and Imports; — including sales, excise, property, severance, and special assessment taxes. |
| Transfer | A non-exchange payment, where no direct good or service is provided in return at the time of payment. |
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