Fit for the future? Towards a lean and efficient public sector Jürgen Stark Member of the Executive Board and the Governing Council of the ECB Berlin,

Slides:



Advertisements
Similar presentations
Domestic Resource Mobilization and the Challenge of Governance Prof. Mushtaq H. Khan Department of Economics SOAS, University of London.
Advertisements

Annual Growth Survey What is the AGS? A communication, which sets out the economic and social priorities for the EU in 2013 Launches the next European.
Fiscal Policy to Fine-Tune the Economy
The Interaction of National and Supranational Fiscal Surveillance: How Much Reform is needed? Peter Wierts De Nederlandsche Bank University of Reading.
Japan’s Fiscal Policy and Fiscal Reconstruction Toshihiro Ihori University of Tokyo.
ROLE OF THE GOVERNMENT.
Agenda About CFIB & our members Top priorities Fiscal Responsibility Taxation Red Tape Issues to watch Workers’ Compensation Commission.
Public Sector Performance and Efficiency : The Status of Small Island States Alexandra Pizzuto and Jean Paul Fabri Prepared for the Conference: “Small.
12 th Annual Public Sector Finance Conference Government Spending Roger Kerr 18 August 2008.
Actuarial Valuations & Unfunded Liabilities Derek Osborne, Horizonow Consultants Atlantic Connection, Miami July 11, 2012.
“Medium-Term Fiscal Framework in Brazilian States” Celia Carvalho President of the Finance State Managers’ Group “Medium-Term Fiscal Framework and Performance.
The Role of Parliament in approving the budget World Bank Institute’s Parliamentary Staff Training Program.
1 Experiences of Using Performance Information in the Budget Process OECD 26 th March 2007 Teresa Curristine, Budgeting and Public Expenditures Division,
The Importance of Macroeconomic Frameworks for Economic Stability Dave Ramsden 11 January 2006.
Country Analysis Hong Kong. Vision Article 5 – Basic Law –Article 5 The socialist system and policies shall not be practised in the Hong Kong Special.
Fiscal Policy and Economic Growth: Lessons for Eastern Europe and Central Asia.
What is a Business or Economic Cycle?. The Economic Cycle This is a term used to describe the tendency of an economy to move its economic growth away.
OECD experience on fiscal sustainability Joint OECD/WHO Meeting on Financial Sustainability of Health Systems Edwin Lau Deputy Head, Budgeting & Public.
Supply Side policies AS Economics.
RELEVANCE OF THE BALANCE OF PAYMENTS SECTOR TO THE GROWTH AND DEVELOPMENT OF THE NIGERIAN ECONOMY FROM 1970 TILL 2013.
AD and AS equilibrium Equilibrium in both markets P Y AD AS Y Potential.
The Third Way: Legacies of the Clinton Administration and Prospects for the Future Tokyo December 12, 2000.
The fiscal costs of ageing in the euro area: will the young have to pay the bill? Ad van Riet Head of the Fiscal Policies Division European Central Bank.
1 Preliminary assessment of progress in implementing the EERP Alexandr Hobza, Directorate General for Economic and Financial Affairs European Commission.
Influence of foreign direct investment on macroeconomic stability Presenter: Governor CBBH: Kemal Kozarić.
BULGARIAN ECONOMY ON THE ROAD TO EUROPEAN UNION AND ECONOMIC AND MONETARY UNION IVAN ISKROV GOVERNOR BULGARIAN NATIONAL BANK 14 July 2006 Athens.
The Policy Process and Budgeting
INTRODUCTION TO PUBLIC FINANCE MANAGEMENT Module 2.1 :Macroeconomics of the budget.
Finance THE PUBLIC FINANCE SYSTEM – BASIC RULES.
Chapter 15 Money, Banking, and Financial Markets: Central Banks in the World Today ©2010 McGraw-Hill Ryerson Ltd. Tim Berry, Humber College.
Fiscal Policy in 2008 Belgrade, November 12, 2007.
Annual Growth Survey What is the AGS? A communication, which sets out the economic and social priorities for the EU in 2013 Launches the next European.
VCE Economics Unit 1 Area of Study 2. Gross Domestic Product (GDP): The figure used to measure a countries’ economy Gross=Total Domestic=Local Product=Item.
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
The World Bank PREM Public Sector Governance 1 Public Expenditure Management: An Introduction Presented to: PREM – WBI Core Course on Public Sector Governance.
Fundamentals Part 3 Economic Systems SSEF4.
Economic Policy Committee The President Medium term expenditure frameworks and performance budgeting: Elements of the Quality of Public Finances Dr. Christian.
THE LINKS BETWEEN ECONOMIC AND SOCIAL POLICIES JOSÉ ANTONIO OCAMPO UNDER-SECRETARY GENERAL ECONOMIC AND SOCIAL AFFAIRS.
CHANGE AND CHALLENGE: The justice system reform process in Latin America LAC SURF.
IGCSE®/O Level Economics
1 Regional Fiscal Overview Anton Marcinčin Bratislava, April 07, 2009 FNSt.
DEMOCRACY, GOVERNANCE AND DEVELOPMENT ROLE OF INSTITUTION IN GOVERNANCE Compiled by Nahoda, A.M.
Fiscal Policy (Government Spending) Fiscal Policy and Government Spending.
SUPPLY SIDE POLICIES YOUSIF AL ZAROUNI. WHAT ARE SUPPLY SIDE POLICIES? Supply side policies are policies designed to improve the supply side potential.
2  Public finance is about the taxing and spending activities of the government.  Also known as “public sector economics” or “public economics.”  Focus.
Ch 7 Ecological Economics: From an Empty World to a Full World (through Growth) ECN101 Prof. Grob.
Economic Challenges of Bulgaria Lecture at the Military Academy of Sofia, July 17, 2003 by Piritta Sorsa, IMF representative in Bulgaria.
Unit 2 Glossary. Macroeconomics The study of issues that effect economies as a whole.
Economic Systems Chapter 2 Section 4 Modern Economies.
Ministry of Finance Sweden Government Offices of Sweden Fiscal rules and medium term budgeting in Sweden Thomas Wilhelmsson, Budget Department, Ministry.
Georgia Council on Economic Education w w w. g c e e. o r g Focus: Understanding Economics in Civics and Government LESSON 4 What Are The Economic Functions.
Karnataka Public Financial Management and Accountability Study Launch Presentation September 14, 2004.
Government Intervention. What do we need to know… What is government intervention Arguments for and against government invention Main economic objectives.
The National Debt Chapter #20. Introduction There is limit to how large a national debt a country can support ( if too large, econ could be in fragile.
Public Expenditure Management: The Essentials for a PER
Quality of government expenditure
Medium-Term Expenditure Scenario Analysis
Public Finance Session1 - Definition.
Research Program: Governance for Agriculture and Rural Development
Kari Kiesiläinen Heikki Liljeroos
Public Finance and Economic Development
Andrew N. Vorkink Country Director for Turkey
Fiscal Sustainability
Budget Sustainability Policies in the Republic of Belarus
Bulgaria – Capital Budgeting And Fiscal Institutions
The 2007 MTBPS: short on detail
Chapter 11: Public and Private Enterprises: Finding the Right Mix
Malawi Public Expenditure Review: Inter-Sectoral Allocations
Federal Budget Significance of a Government Budget p. 455
CHAPTER 1 CHAPTER 1: INTRODUCTION TO PUBLIC FINANCE (INDIVIDUALS AND GOVERNMENT) Prepared by Professor: Mr. SOEM Pheakkdey, (BA, MFI, and MPS) Telephone:
Presentation transcript:

Fit for the future? Towards a lean and efficient public sector Jürgen Stark Member of the Executive Board and the Governing Council of the ECB Berlin, 23 March 2007

1. Introduction Central bank perspective on fiscal policy:  Budgetary consolidation and fiscal stance (short-term)  Sustainability of public finances (long-term) Independent central banks at arms length from “politics” of public spending, but:  Public sector performance and efficiency matter  Relevant for economic growth and fiscal sustainability Today:  Broader reflections on role and size of public sector

2. The core objectives of government (1) Adam Smith: The Wealth of Nations  State should be responsible for: “erecting and maintaining those public works, which, though they may be in the highest degree advantageous to a great society, are…of such a nature, that the profit could never repay the expense to any individual or small number of individuals” Basic Public Goods with limited scope  Rule of law (public administration, police, judiciary)  Basic infrastructure (roads, railways)  Defence  Education  Basic social safety net and healthcare

3. The rise of government expenditure

4. The core objectives of government (2) Post-war enthusiasm for state intervention Musgrave: objectives of fiscal policy:  Allocation  Stabilisation  Redistribution Hayek, Buchanan: criticised “big” government  Framework of rules for markets, incentives, opportunities Consensus view?  Need to focus on core objectives and achieve them in an efficient manner.

5. Cross country differences in public spending

6. How effective is public spending? (1) Spending can come to be seen as an end in itself (e.g. election pledges) Need to distinguish between “means” and “ends” Growing interest in “quality” and “effectiveness” of public spending: Inputs (spending)  Outputs (performance) Does more spending lead to better performance?  Not always  Can “get more for less”

8 7. How effective is public spending (2)

9 8. How effective is public spending? (3)

10 9. How large does government need to be ? (1)

How large does government need to be? (2) Objective / spending category Efficient performers Spending (% GDP) Education Education JP, NL, UK ≈ 5% Other goods and services Other goods and services JP, NZ, CH ≈ 10% Infrastructure / investment Infrastructure / investment AT, CA, CH, SE 2-3% Redistribution / transfers Redistribution / transfers JP, NO 10-15% Total primary spending ≈ 30% Interest payments Interest payments2-3% Total expenditure 30-35%

11. Concluding remarks  Public sector should use resources efficiently  Spending ratio of 30-35% of GDP should be enough to attain core objectives (leaving room to adapt to change)  Case for reform is too compelling to be missed