Abstract. This study analyses the composition of federal government expenditure across countries. The analysis is based on a simultaneous-equation model tested on World Bank data for 88 countries (1968-1997), classified by regime types. A 3SLS technique is used to estimate the model. The structure of spending differs between democracies and dictatorships. The tentative results indicate that the implied relation between the expenditure structure and political freedom (defining a regime) also varies by types of expenditure. The shares of spending on pure public goods have a negative linear relation with political freedom but the shares of social protection, current consumption, education, and health care each has an inverted-U shaped relation. The shares of capital spending and growth-oriented infrastructure expenses have on the other hand a U-shaped relation with the level of freedom. The structure of expenditure itself is primarily determined by socio-demographic characteristics of the people, institutions, culture, legal and political systems in the country, and the prices paid for each type of expenditure. Economic policy and growth rates have very little influence in determining the composition of spending. An OECD country is found to spend more on redistribution, but less on public consumption including defense. A Muslim country spends more on defense and public consumption but a predominantly Christian country spends less on defense but more on health care, social welfare, general public services, transfers and subsidies.