Government pay and employment policies and government performance in developing economies

The aim of this paper is to offer a systematic examination of government pay and employment trends in developing nations. In section I, the difficulties inherent in analyzing government pay and employment policies are considered. Special attention is given to weaknesses in public expenditure theory and to the non-market character of government output. Section II highlights the problems generated by inappropriate government pay and employment policies. Most attention is given however to how government performance as a provider of goods and services is affected by inappropriate pay offers or the pursuit of independant government employment objectives. Section III presents the available evidence on recent trends in government pay and employment in developing nations. Movements in real government pay, wage compression, public sector employment growth and the wage bill are considered. Section IV offers a brief conclusion.