IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/1996-019.html
   My bibliography  Save this paper

Do Government Wage Cuts Close Budget Deficits? a Conceptual Framework for Developing Countries and Transition Economies

Author

Listed:
  • International Monetary Fund

Abstract

Real wage declines have been common in the public sector in many countries over substantial periods of time. In several cases, such wage reductions have coincided with a decline in the efficiency of the public sector. In a simple analytical framework, it is shown that higher wage levels alter the incentive compatible equilibrium by attracting relatively skilled human capital to the government sector, which raises the quality of public output--tax revenue collection in this paper. Increases in wages should be complemented with appropriate monitoring and penalty rates for effective tax administration; prescriptions of raising the statutory tax rate alone, however, may not increase revenue collection.

Suggested Citation

  • International Monetary Fund, 1996. "Do Government Wage Cuts Close Budget Deficits? a Conceptual Framework for Developing Countries and Transition Economies," IMF Working Papers 1996/019, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1996/019
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=2007
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Faiz Bilquees, 2006. "Civil Servants’ Salary Structure," Microeconomics Working Papers 22185, East Asian Bureau of Economic Research.
    2. Fischer, Stanley & Sahay, Ratna & Vegh, Carlos, 1998. "How far is Eastern Europe from Brussels?," MPRA Paper 20059, University Library of Munich, Germany.
    3. Litina, Anastasia & Palivos, Theodore, 2016. "Corruption, tax evasion and social values," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 164-177.
    4. Litina Anastasia & Varvarigos Dimitrios, 2023. "Family Ties and Corruption," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 23(1), pages 195-222, January.
    5. Johannes W. Fedderke & Kamil Akramov & Robert E. Klitgaard, 2011. "Heterogeneity Happens: How Rights Matter in Economic Development," Working Papers 220, Economic Research Southern Africa.
    6. Fischer, Stanley & Sahay, Ratna & Vegh, Carlos, 1998. "From transition to market: Evidence and growth prospects," MPRA Paper 20615, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:1996/019. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.