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The Size and Performance of Public Sector Activities in Europe

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  • Heinz Handler

    (WIFO)

  • Bertrand Koebel
  • Philipp Reiss
  • Margit Schratzenstaller

    (WIFO)

Abstract

The obvious difference in the economic performance of countries has led to the question why some countries are so much wealthier than others, and whether the size, the structure, and the organisation of the public sector contribute to cross-country income and growth gaps. Public sector activities may have an effect on overall productivity and growth either directly by the level and changes of productivity within the public sector, or indirectly by triggering off productivity changes in private production. This paper is concerned with the former aspect. It provides an overview of the size and the structure of the public sector in Europe and compares it with the US and Japan. This is related to the more recent empirical literature on public sector performance. After reviewing some of the measurement issues related to public services, the evidence on the size of government and its performance is analysed. The results on industrial countries are not fully conclusive, but seem to attribute more efficiency to smaller rather than to larger governments. Public sector reforms to consolidate the size of government are therefore likely to enhance the sector's own productivity and thereby positively contribute to overall economic performance.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Paper provided by WIFO in its series WIFO Working Papers with number 246.

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Length: 31 pages
Date of creation: 23 Feb 2005
Date of revision:
Handle: RePEc:wfo:wpaper:y:2005:i:246

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Keywords: The Size and Performance of Public Sector Activities in Europe;

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References

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  1. António Afonso & Miguel St. Aubyn, 2004. "Non-parametric Approaches to Education and Health Expenditure Efficiency in OECD Countries," Working Papers Department of Economics 2004/01, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  2. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
  3. Olivier Blanchard, 2004. "The Economic Future of Europe," NBER Working Papers 10310, National Bureau of Economic Research, Inc.
  4. Tito Boeri & Axel Börsch-Supan & Guido Tabellini, 2001. "Would you like to shrink the welfare state? A survey of European citizens," Economic Policy, CEPR & CES & MSH, vol. 16(32), pages 7-50, 04.
  5. Barro, R.J., 1989. "Economic Growth In A Cross Section Of Countries," RCER Working Papers 201, University of Rochester - Center for Economic Research (RCER).
  6. Heinz Handler & Andreas Knabe & Bertrand Koebel & Margit Schratzenstaller & Sven Wehke, 2005. "The Impact of Public Budgets on Overall Productivity Growth," WIFO Working Papers 255, WIFO.
  7. Afonso, António & Schuknecht, Ludger & Tanzi, Vito, 2003. "Public sector efficiency: an international comparison," Working Paper Series 0242, European Central Bank.
  8. Isabelle Joumard & Per Mathis Kongsrud & Young-Sook Nam & Robert W.R. Price, 2004. "Enhancing the Effectiveness of Public Spending: Experience in OECD Countries," OECD Economics Department Working Papers 380, OECD Publishing.
  9. Oates, Wallace E., 1993. "Fiscal Decentralization and Economic Development," National Tax Journal, National Tax Association, vol. 46(2), pages 237-43, June.
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Citations

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Cited by:
  1. Heinz Handler & Andreas Knabe & Bertrand Koebel & Margit Schratzenstaller & Sven Wehke, 2005. "The Impact of Public Budgets on Overall Productivity Growth," WIFO Working Papers 255, WIFO.
  2. Seri, Paolo & Zanfei, Antonello, 2013. "The co-evolution of ICT, skills and organization in public administrations: Evidence from new European country-level data," Structural Change and Economic Dynamics, Elsevier, vol. 27(C), pages 160-176.
  3. Sotiris Theodoropoulos, 2012. "Seeking a sustainable size and structure for the Greek public sector’s activities according to the fiscal pact for Euro," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 62(3-4), pages 75-92, July - De.
  4. Faridah Djellal & Faïz Gallouj, 2012. "Beyond Productivity Measurement and Strategies: Performance Evaluation and Strategies in Services," Working Papers halshs-00748099, HAL.
  5. Ad van Riet & Moreno Roma, 2006. "Competition, productivity and prices in the euro area services sector," Occasional Paper Series 44, European Central Bank.

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