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Expenditure reform in industrialised countries: a case study approach

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

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. JEL Classification: H5, H6, O57

Suggested Citation

  • Schuknecht, Ludger & Hauptmeier, Sebastian & Heipertz, Martin, 2006. "Expenditure reform in industrialised countries: a case study approach," Working Paper Series 634, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:2006634
    Note: 175489
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    More about this item

    Keywords

    case studies; Debt; deficit; economic growth; employment; expenditure reform; fiscal institutions; public expenditure;
    All these keywords.

    JEL classification:

    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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