State administration consists of central and territorial offices of the national state: the employees of the ministries, regulatory and fiscal agencies, social security and labor office administration, and their territorial branches. This category excludes employees in state health care, education, and the armed forces. The data used in Chapter 4 and throughout the book were gathered from the national statistical offices in the countries under consideration.

This book relies on government statistical offices reporting of the Statistical Classification of Economic Activities in the European Community (NACE) state administration category. The NACE is used in all of the countries under consideration, and has been used consistently since 1990. The main category used and reported here is L: state administration and defense; compulsory social security. This category includes the following: administration of the state and economic and social policy of the community, general public service activities, regulation activities of state agencies, regulation and contribution to more efficient operation of business, supporting service activities for government as a whole, provision of services to the community as a whole, foreign affairs, defense activities, justice and judicial activities, public security, law and order activities, fire service activities, and compulsory social service activities. The L category excludes the soldiers and officers of the armed forces. It also explicitly excludes education and health care (reported in the M and N categories, respectively), as well as other community, social, and personal service activities (sanitation, membership organizations, media, artistic and literary activities, libraries and archives, sports arenas and recreational activities, or museums and national parks), which are reported in the O category.