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Government Wage Bill Management and Civil Service Reform in the Eastern Caribbean Currency Union

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  • Mr. A. E. Wayne Mitchell
  • Ronald James
  • Ann Marie Wickham

Abstract

In this study, we assess the size of the government wage bill and employment in the member countries of the Eastern Caribbean Currency Union and their implications for fiscal sustainability and the adequacy of public service delivery. Over the period 2005 to 2015 their wage bill (as a percentage of GDP, government revenues and expenditures) is higher than in other small states notwithstanding recent efforts by governments to make it more manageable. The composition and distribution of employment is sub-optimal and is reflected in skills mismatches contributing to inefficiencies in public service delivery. Using a dynamic fixed-effects panel, we find that wage bill growth reflects the expansion of government activities to speed up economic and social development and that wage bill spending is procyclical in good times but is rigid during downturns. Finally, we identify the main institutional and legal reforms needed to improve wage bill management and public service efficiency.

Suggested Citation

  • Mr. A. E. Wayne Mitchell & Ronald James & Ann Marie Wickham, 2019. "Government Wage Bill Management and Civil Service Reform in the Eastern Caribbean Currency Union," IMF Working Papers 2019/110, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2019/110
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    References listed on IDEAS

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    1. George J. Borjas, 2002. "The Wage Structure and the Sorting of Workers into the Public Sector," NBER Working Papers 9313, National Bureau of Economic Research, Inc.
    2. Carmen Carpio & Danielle Fuller-Wimbush, 2016. "The Nurse Workforce in the Eastern Caribbean," World Bank Publications - Books, The World Bank Group, number 24452, December.
    3. World Bank, 2005. "Organization of Eastern Caribbean States : Towards a New Agenda for Growth," World Bank Publications - Reports 8616, The World Bank Group.
    4. Dimitri G. Demekas & Zenon G. Kontolemis, 2000. "Government Employment and Wages and Labour Market Performance," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(3), pages 391-415, July.
    5. Ms. Magda E. Kandil & Mrs. Genevieve M Lindow & Mr. Mario Mansilla & Mr. Joel Chiedu Okwuokei & Jochen M. Schmittmann & Qiaoe Chen & Xin Li & Marika Santoro & Solomon Stavis, 2014. "Labor Market Issues in the Caribbean: Scope to Mobilize Employment Growth," IMF Working Papers 2014/115, International Monetary Fund.
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    Cited by:

    1. Ronald James & Jemma Lafeuillee & Mike Xin Li & Mr. Gonzalo Salinas & Yevgeniya Savchenko, 2019. "Explaining High Unemployment in ECCU Countries," IMF Working Papers 2019/144, International Monetary Fund.

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