Public Expenditure Policies in Southeast Europe
121 pages
English

Public Expenditure Policies in Southeast Europe

YouScribe est heureux de vous offrir cette publication
121 pages
English
YouScribe est heureux de vous offrir cette publication

Description

The countries of Southeast Europe have undergone a significant transition over the past decade. Helped by macroeconomic stabilization and efforts in advancing structural reforms, real GDP growth has picked up this century. Fiscal adjustment has been an integral part of the transition. Expenditure cuts have helped trim spending relative to GDP in most countries in the region and cut fiscal deficits everywhere except in Serbia.
Progress in fiscal consolidation has been substantial, but in several of the countries the government's presence in the economy remains oversized. Costs related to advancing EU integration and completing reforms are expected to generate further pressures for public spending. Creating the fiscal space for addressing such pressures would require a further reduction in existing spending, given that there is still scope for increasing tax rates.
The report identifies key remaining challenges and proposes a menu of options in further reforms in sectors that account for the largest shares of public spending, and where reforms are likely to have significant budgetary implications. The sectors discussed in the report are social protection, health, education, public administration, and infrastructure.

Informations

Publié par
Publié le 20 février 2008
Nombre de lectures 10
EAN13 9780821374511
Langue English

Extrait

WORLD BANK WORKING PAPER NO. 134
Public Expenditure Policies in
Southeast Europe
Ivailo V. Izvorski
Satu Kahkonen
THE WORLD BANKWORLD BANK WORKING PAPER NO. 134
Public Expenditure Policies
in Southeast Europe
Ivailo V. Izvorski
Satu Kahkonen
THE WORLD BANK
Washington, D.C.Copyright © 2008
The International Bank for Reconstruction and Development/The World Bank
1818 H Street, N.W.
Washington, D.C. 20433, U.S.A.
All rights reserved
Manufactured in the United States of America
First Printing: February 2008
printed on recycled paper
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The findings, interpretations, and conclusions expressed herein are those of the author(s)
and do not necessarily reflect the views of the International Bank for Reconstruction and
Development/The World Bank and its affiliated organizations, or those of the Executive Directors
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ISBN-13: 978-0-8213-7450-4
eISBN: 978-0-8213-7451-1
ISSN: 1726-5878 DOI: 10.1596/978-0-8213-7450-4
Cover photo by Yosef Hadar.
Ivailo V. Izvorski is Senior Country Economist in the Poverty Reduction and Economic Man-
agement unit of the Europe and Central Asia Department at the World Bank. Satu Kahkonen
is Lead Country Economist in the Poverty Reduction and Economic Management unit of the
South Asia Department at the World Bank.
Library of Congress Cataloging-in-Publication Data has been requested.Contents
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Acronyms and Abbreviations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
Executive Summaryxi
1. Fiscal Developments and Government Spending. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Government Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Level and Trend of General Government Expenditures. . . . . . . . . . . . . . . . . . . . . . . . 7
Expenditure Composition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Lessons Learned from EU Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2. Ensuring Social Welfare: Social Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Public Social Protection Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Reforming the Pension System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Reforming Social Welfare Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Reforming Labor-Market Support Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Conclusions and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3. Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
The Institutional Setup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Health Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Health Outcomes and Utilization of Healthcare . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Health Financing and Expenditures Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Conclusions and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4. Education. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Education Expenditures and Sources of Financing . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Education Outcomes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Institutional and Policy Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Efficiency Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Equity Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Conclusions and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
5. Size, Structure, and Remuneration of the Public Service . . . . . . . . . . . . . . . . . . . . 71
Comparative Analysis of Public Sector Wage Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Trends in Public Sector Staffing and Wage Levels. . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
iiiiv Contents
Wage Setting Mechanism and Pay Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Ongoing Reforms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Conclusions and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6. Infrastructure: Fiscal Space and Public Investment Management. . . . . . . . . . . . . 85
Infrastructure Gaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Macroeconomic Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Fiscal Space. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Public Investment Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Conclusions and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
LIST OF TABLES
1.1. Income Levels in Most SEE Countries Are Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. The Countries of Southeast Europe: Relations with the EU . . . . . . . . . . . . . . . . . . . . 4
1.3. SEE, Decomposing Fiscal Adjustment, 2000–054
1.4. General Government Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.5. Fiscal Developments in SEE, 1997–2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.6. General Government Interest Payments and Primary Expenditures, 1997–2006 . . . . 9
1.7. General Government Expenditures, Economic Classification. . . . . . . . . . . . . . . . . . 12
1.8. General Goveres, Functional Classification . . . . . . . . . . . . . . . . . 15
1.9. Expenditure Adjustments in Select EU Countries in 1990s . . . . . . . . . . . . . . . . . . . . . 17
2.1. Public Revenues and Expenditures on Social Protection . . . . . . . . . . . . . . . . . . . . . . 20
2.2. Public Expenditures on Social Protection: A Breakdown, 2005 . . . . . . . . . . . . . . . . . 22
2.3. Payroll Contribution Rates in SEE and Selected CEE Countries, 2006. . . . . . . . . . . 23
2.4. Basic Features of Reformed PAYG Systems in SEE . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.5. Second Pillar Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.1. Sources of Healthcare Financing, 2005. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.2. Health Expenditure in SEE, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
3.3. Health Spending as Percentage

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