Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152869
Authors: 
Schuknecht, Ludger
Tanzi, Vito
Year of Publication: 
2005
Series/Report no.: 
ECB Working Paper 435
Abstract: 
In this paper, we show that, contrary to common beliefs, over the past two decades several countries were able to reduce public spending by remarkable amounts. These countries did not seem to have suffered from these large reductions either in a macroeconomic sense, or in terms of lower values for socio-economic indicators. On the contrary, ambitious expenditure reform coincides with improvements in fiscal, economic, human development and institutional indicators. Positive developments associated with expenditure reform, in some instances, have taken a while to materialize and early and persistent reformers have, hence, already seen more of them. Unfavourable effects on income distribution within countries are small and they are mitigated in absolute terms by faster growth in the medium run and by the possibilities of better targeting of public spending. Moreover, there is significant divergence across countries that suggests that country circumstances and reform design matter.
Subjects: 
Economic Growth
expenditure reform
public expenditure
socio economic indicators
JEL: 
H5
H6
O57
Document Type: 
Working Paper

Files in This Item:
File
Size
712.46 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.