Expenditure Reform in Industrialised Countries: A Case Study Approach

51 Pages Posted: 27 Jul 2006 Last revised: 26 Aug 2008

See all articles by Sebastian Hauptmeier

Sebastian Hauptmeier

European Central Bank (ECB) - Directorate General Economics

Martin Heipertz

European Central Bank - International and European Relations

Ludger Schuknecht

European Central Bank (ECB)

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Date Written: 2006

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.

Keywords: public expenditure, expenditure reform, economic growth, deficit, debt, employment, case studies, fiscal institutions

JEL Classification: H5, H6, O57

Suggested Citation

Hauptmeier, Sebastian and Heipertz, Martin and Schuknecht, Ludger, Expenditure Reform in Industrialised Countries: A Case Study Approach (2006). ZEW - Centre for European Economic Research Discussion Paper No. 06-050. Available at SSRN: https://ssrn.com/abstract=920402 or http://dx.doi.org/10.2139/ssrn.920402

Sebastian Hauptmeier (Contact Author)

European Central Bank (ECB) - Directorate General Economics ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany

Martin Heipertz

European Central Bank - International and European Relations ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Ludger Schuknecht

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany
+49 69 1344 6494 (Phone)
+49 69 1344 7809 (Fax)

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