Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263691 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 9761
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We assess the consequences of fiscal consolidation episodes on public sector efficiency (scores) for 35 OECD countries for the 2007-2020 period. We find that fiscal consolidations improve public sector efficiency and results are robust across efficiency models. Moreover, peripheral euro-area economies and economies with debt-to-GDP ratios between 60% and 90% are those whose public sector efficiency scores improve more when fiscal consolidation episodes occur. The evidence that fiscal consolidations enhance spending efficiency is an additional argument for fiscal consolidations, from a policy perspective.
Subjects: 
fiscal consolidation episodes
government spending efficiency
panel data
OECD
JEL: 
C23
D61
H21
E62
H63
Document Type: 
Working Paper
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