Public Sector Efficiency and Fiscal Austerity
AbstractThis paper uses a simple model to analyze the forces that determine the size of the public sector and the quality of workers employed in that sector. Workers are heterogeneous, and the public sector chooses an employment strategy that maximizes a social welfare function U(s, Y) that depends on the share of the labor force employed in public service s and private sector output Y. The government is fully informed about worker productivity. By examining the welfare properties of the possible outcomes, we are able to illuminate situations in which policies that seek to constrain the public sector may or may not improve economic efficiency.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 98/56.
Date of creation: 01 Apr 1998
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- Matei, Ani & Savulescu, Carmen, 2009. "The Impact of Reducing the Administrative Costs on the Efficiency in the Public Sector," MPRA Paper 19018, University Library of Munich, Germany, revised 15 Nov 2009.
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- Nadeem Ul Haque, 2007. "Why Civil Service Reforms Do Not Work," PIDE-Working Papers 2007:24, Pakistan Institute of Development Economics.
- repec:idb:brikps:4198 is not listed on IDEAS
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