We study the determinants of employment and wages in the public sector, using a new set of panel data for 34 LDCs and 21 OECD countries from 1972–992, by estimating equations suggested by an efficiency wage model. We find that government employment is positively associated with the relaxation...

This paper uses a simple model to analyze the forces that determine the size of the public sector and the quality of workers employed in that sector. Workers are heterogeneous, and the public sector chooses an employment strategy that maximizes a social welfare function U(s, Y) that depends on...

This paper pursues several objectives. First, it presents a sketch of a positive (or real-world) theory of public sector intervention. Second, it analyzes in some detail the activity of the public sector in nine market economies of developing Asia and relates this activity to the growth of the...

This paper argues that the development of human capital in the public sector should be an important ingredient in any proposed set of “second-generation” reforms for Africa. In the post-colonial era the quality of governance has seriously declined, and the stock of human capital in the...

Increasing public debt vulnerabilities in low-income developing countries (LIDCs) have heightened the need for fuller and more transparent accounting of public sector debt (PSD). The framework for reporting on public sector debt is sound. But there is room for LIDCs to further improve their...

Denmark’s flexicurity model has performed well during the crisis. The actions and the improvement in economic conditions have restored overall stability to the banking system. Private consumption has been dented by the decline in housing prices and net household wealth. Exports have...

The paper discusses the flexicurity model, its key policy elements, and association with a low unemployment rate and a high standard of social security for the unemployed. It provides details of an empirical analysis of unemployment performance and the flexicurity model. It also presents...

France’s economic short-term outlook is positive, and long-term prospects have improved. Fiscal adjustment remains high on the government’s agenda. Tax reforms have improved the economy’s growth potential. Reforms in financial, labor, and product markets are necessary to...

Rigidities in Greece’s product and labor markets leading to economic imbalances and the significance of reforms to these markets are played out in the first paper. The second paper describes the problems, progress to date, and agenda for work in Greece’s revenue administration and...

Belgium has effected a remarkable fiscal adjustment, best illustrated by the decline in its public debt. While benefiting from an appreciable decline in interest rates, most of the underlying consolidation reflected a considerable increase in the tax burden, one of the highest in the...