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Expenditure reform in industralised countries: a case study approach

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  • Hauptmeier, Sebastian
  • Heipertz, Martin
  • Schuknecht, Ludger

Abstract

This study examines reforms of public expenditure in industrialised countries over the past two decades. We distinguish ambitious and timid reformers and analyse in detail reform experiences in eight case studies of ambitious reform episodes. We find that ambitious reform countries reduce spending on transfers, subsidies and public consumption while largely sparing education spending. Such expenditure retrenchment is also typically part of a comprehensive reform package that includes improvements in fiscal institutions as well as structural and other macroeconomic reforms. The study finds that ambitious expenditure retrenchment and reform coincides with large improvements in fiscal and economic growth indicators. --

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 06-50.

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Date of creation: 2006
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Handle: RePEc:zbw:zewdip:5443

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Keywords: public expenditure; expenditure reform; economic growth; deficit; debt; employment; case studies; fiscal institutions;

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References

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Citations

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Cited by:
  1. Byrne, Joseph P. & Fiess, Norbert & MacDonald, Ronald, 2011. "The global dimension to fiscal sustainability," Journal of Macroeconomics, Elsevier, vol. 33(2), pages 137-150, June.
  2. Alberto Alesina & Dorian Carloni & Giampaolo Lecce, 2012. "The Electoral Consequences of Large Fiscal Adjustments," NBER Chapters, in: Fiscal Policy after the Financial Crisis, pages 531-570 National Bureau of Economic Research, Inc.
  3. António Afonso, 2006. "Expansionary fiscal consolidations in Europe: new evidence," Working Papers 2006/18, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon..
  4. Nadine Leiner-Killinger & Víctor López Pérez & Roger Stiegert & Giovanni Vitale, 2007. "Structural reforms in EMU and the role of monetary policy – a survey of the literature," Occasional Paper Series 66, European Central Bank.
  5. Martin Heipertz & Melanie Ward-Warmedinger, 2008. "Economic and Social Models in Europe and the Importance of Reform," Financial Theory and Practice, Institute of Public Finance, vol. 32(3), pages 255-287.
  6. Martin Larch & Alessandro Turrini, 2008. "Received wisdom and beyond: Lessons from fiscal consolidation in the EU," European Economy - Economic Papers 320, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  7. Bertola, Giuseppe, 2010. "Fiscal Policy and Labor Markets at Times of Public Debt," CEPR Discussion Papers 8037, C.E.P.R. Discussion Papers.
  8. Athanasios Tagkalakis, 2009. "Fiscal adjustments: do labor and product market institutions matter?," Public Choice, Springer, vol. 139(3), pages 389-411, June.
  9. Richard Morris & Hedwig Ongena & Ludger Schuknecht, 2006. "The reform and implementation of the Stability and Growth Pact," Occasional Paper Series 47, European Central Bank.
  10. António Afonso, 2007. "Expansionary fiscal consolidations in Europe: part of conventional wisdom?," Money Macro and Finance (MMF) Research Group Conference 2006 50, Money Macro and Finance Research Group.
  11. Niamh Hardiman & Patrick Murphy & Orlaith Burke, 2008. "Legitimating Fiscal Stabilization: Ireland in Comparative Perspective," Working Papers 200813, Geary Institute, University College Dublin.
  12. Bouthevillain, C. & Paul, L. & Pavot, J., 2007. "Debt retrenchment strategies and control of public spending," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 08, pages 5-34, Summer.
  13. Paulo Roberto Arvate & Marcos Felipe Mendes Lopes, 2007. "Institutional Changes, Incentive Schemes And The Decision To Undertake Fiscal Adjustments," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 010, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  14. Andrews, Matthew, 2008. "Are One-Best-Way Models of Effective Government Suitable for Developing Countries?," Working Paper Series rwp08-014, Harvard University, John F. Kennedy School of Government.
  15. Alexander Plekhanov & Manmohan S. Kumar & Daniel Leigh, 2007. "Fiscal Adjustments: Determinants and Macroeconomic Consequences," IMF Working Papers 07/178, International Monetary Fund.

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