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Martin Heipertz

26 May 2006
WORKING PAPER SERIES - No. 634
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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 Code
H5 : Public Economics→National Government Expenditures and Related Policies
H6 : Public Economics→National Budget, Deficit, and Debt
O57 : Economic Development, Technological Change, and Growth→Economywide Country Studies→Comparative Studies of Countries