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Spending
Kinds of Spending Terms modified by Spending Selected AbstractsSTOP US BEFORE WE SPEND AGAIN: INSTITUTIONAL CONSTRAINTS ON GOVERNMENT SPENDINGECONOMICS & POLITICS, Issue 3 2006DAVID M. PRIMO A distributive politics model establishes that the presence of exogenously enforceable spending limits reduces spending and that the effect of executive veto authority is contingent on whether spending is capped and whether the chief executive is a liberal or conservative. Surprisingly, when spending limits are in place, governments with conservative executives spend more than those with more liberal chief executives. Limits are welfare improving, as is the executive veto when it leads to the building of override coalitions. Using 32 years of US state budget data, this paper also establishes empirically that strict balanced budget rules constrain spending and also lead to less pronounced short-term responses to fluctuations in a state's economy. Party variables like divided government and party control of state legislatures tend to have little or no direct effect, with political institutions and economic indicators explaining much of the variation in state spending. [source] POLITICAL ECONOMY OF GOVERNMENT SPENDING FOR TRADE LIBERALIZATION: POLITICS OF AGRICULTURE RELATED GOVERNMENT SPENDING FOR THE URUGUAY ROUND IN JAPANTHE JAPANESE ECONOMIC REVIEW, Issue 2 2010KOZO HARIMAYA This paper investigates the effect of political factors on the interregional allocation of the budget to assist farmers in coping with agricultural trade liberalization in Japan. We present a simple model to show the relationship between political factors and interregional budget allocation and empirically examine whether political factors played a key role in the interregional allocation of Japanese government spending for the Uruguay Round agricultural trade liberalization. Our findings show that this allocation was distorted due to political reasons, which was problematic from the standpoints of fairness and social efficiency. [source] Is There a Place for Virtual Poverty Funds in Pro-Poor Public Spending Reform?DEVELOPMENT POLICY REVIEW, Issue 4 2003Lessons from Uganda's PAF Various developing countries with weak public expenditure management systems are establishing virtual poverty funds (VPFs), drawing on the experience of Uganda's Poverty Action Fund. As a mechanism for tagging and tracking the performance of specific poverty-reducing expenditures in the budget, a VPF can be useful. However, this article argues that such devices should be treated from the outset as transitional, and as part of wider processes of strengthening public expenditure management; otherwise, they can seriously distort public expenditure allocations and management systems, potentially undermining growth. Emphasis needs to be placed on identifying the right balance of expenditures in the entire budget; improving the effectiveness and efficiency of existing allocations; and developing better public-sector policies for promoting pro-poor private sector growth. [source] Unemployment, Government Spending and the Laffer Effect,FISCAL STUDIES, Issue 2 2010Ludger Linnemann E62 Abstract The paper studies the effects of income tax rate changes in a general equilibrium model with frictional unemployment. Laffer curve effects, by which a tax rate reduction may increase the level of government spending or its share in output, are shown to be possible under certain conditions. These are the presence of unemployment benefit payments, government budget balance through fiscal spending adjustment and limited quantitative importance of labour reallocation costs. Endogenous government spending acts as a fiscal accelerator if the fiscal burden of unemployment benefit payments is large, but reduces the employment effects of tax rate cuts if it is low. [source] Spending on new drug development,HEALTH ECONOMICS, Issue 2 2010Christopher Paul Adams Abstract This paper replicates DiMasi et al. (J. Health Econ. 2003; 22: 151,185; Drug Inf. J. 2004; 38: 211,223) estimates of expenditure on new drug development using publicly available data. The paper estimates that average expenditure on drugs in human clinical trials is around $27m per year, with $17m per year on drugs in Phase I, $34m on drugs in Phase II and $27m per year on drugs in Phase III of the human clinical trials. The paper's estimated expenditure on new drug development is somewhat greater than suggested by the survey results presented in DiMasi et al. (J. Health Econ. 2003; 22: 151,185; Drug Inf. J. 2004; 38: 211,223). The paper combines a 12-year panel of research and development expenditure for 183 publicly traded firms in the pharmaceutical industry with panel of drugs in human clinical trials for each firm over the same period. The paper estimates drug expenditure by estimating the relationship between research and development expenditure and the number of drugs in development for 1682 company/years (183 firms multiplied by the number of years for which we have financial and drug development information). The paper also estimates expenditure on drugs in various therapeutic categories. Copyright © 2009 John Wiley & Sons, Ltd. [source] The Effect of Three-Tier Formulary Adoption on Medication Continuation and Spending among Elderly RetireesHEALTH SERVICES RESEARCH, Issue 5 2007Haiden A. Huskamp Objective. To assess the effect of three-tier formulary adoption on medication continuation and spending among elderly members of retiree health plans. Data Sources. Pharmacy claims and enrollment data on elderly members of four retiree plans that adopted a three-tier formulary over the period July 1999 through December 2002 and two comparison plans that maintained a two-tier formulary during this period. Study Design. We used a quasi-experimental design to compare the experience of enrollees in intervention and comparison plans. We used propensity score methods to match intervention and comparison users of each drug class and plan. We estimated repeated measures regression models for each class/plan combination for medication continuation and monthly plan, enrollee, and total spending. We estimated logit models of the probability of nonpersistent use, medication discontinuation, and medication changes. Data Collection/Extraction Methods. We used pharmacy claims to create person-level drug utilization and spending files for the year before and year after three-tier adoption. Principal Findings. Three-tier formulary adoption resulted in shifting of costs from plan to enrollee, with relatively small effects on medication continuation. Although implementation had little effect on continuation on average, a small minority of patients were more likely to have gaps in use and discontinue use relative to comparison patients. Conclusions. Moderate cost sharing increases from three-tier formulary adoption had little effect on medication continuation among elderly enrolled in retiree health plans with relatively generous drug coverage. [source] Market Valuation of Research and Development Spending under Canadian GAAP,ACCOUNTING PERSPECTIVES, Issue 1 2004ANTONELLO CALLIMACI ABSTRACT Section 3450 of the Canadian Institute of Chartered Accountants (CICA) Handbook requires Canadian firms to capitalize development costs that meet certain criteria and to expense those that relate to research. International Accounting Standard (IAS) No. 38 favours a similar approach. In the United States, Statement of Financial Accounting Standard (SFAS) No. 2 recommends the immediate expensing of all research and development (R&D) spending. The only exception is SFAS No. 86, which requires software development costs to be capitalized when a product successfully passes a technological feasibility test. Consequently, the Canadian financial disclosure regime provides a rich setting for testing the market valuation of capitalized R&D. Our primary research question asks whether capitalized R&D provides useful information to market participants investing in Canadian firms. We use price-level and return models to assess the value relevance of capitalized R&D disclosed in the financial statements under Canadian GAAP. In line with expectations, using a price-level model, we find that capitalized R&D and R&D expense as disclosed in the financial statements provide information that is value relevant to market participants. However, we find that R&D capitalized during the year helps explain returns while R&D expense does not. Thus we conclude that the application of section 3450 of the CICA Handbook produces value-relevant information. [source] Openness, Uncertainty, and Social Spending: Implications for the Globalization, Welfare State DebateINTERNATIONAL STUDIES QUARTERLY, Issue 3 2009Irfan Nooruddin We extend the literature on openness and spending in developing countries arguing that the effect of increasing openness depends on both regime type and the level of openness. Democracies respond to increases in openness by increasing spending while dictatorships respond by decreasing spending. However, the degree to which countries pursue the strategy of choice depends on the level of openness. In autarkic countries, an increase in import competition has more severe consequences for perceptions of job insecurity and dislocation. In response, government management of openness will be more vigorous under these conditions regardless of whether the leader increases or decreases spending. Economic selection mechanisms at work will produce an outcome wherein, at higher levels of openness, further import liberalization has smaller effects on perceptions of job insecurity and dislocation. Hence, both the demand and the supply of government management of openness will be lower. [source] Government Spending and the Taylor PrincipleJOURNAL OF MONEY, CREDIT AND BANKING, Issue 1 2009GISLE JAMES NATVIK public expenditures; Taylor principle; fiscal policy rules; rule-of-thumb consumers This paper explores how government size affects the scope for equilibrium indeterminacy in a New Keynesian economy, where part of the population live hand-to-mouth. The main result is that a higher level of public consumption is likely to generate indeterminacy and render the Taylor principle insufficient as criterion for equilibrium uniqueness. This holds even though fiscal policy serves to reduce swings in current income. Only if government consumption is a substitute for private consumption, will it narrow the scope for indeterminacy. Hence monetary policy should be conducted with an eye to the amount and composition of government consumption. [source] The Size and Composition of Government Spending in Europe and Its Impact on Well-BeingKYKLOS INTERNATIONAL REVIEW OF SOCIAL SCIENCES, Issue 3 2010Zohal Hessami SUMMARY This paper empirically analyzes whether large governments in Europe reflect efficient responses to a changing social and economic environment (,welfare economic view') as opposed to wasteful spending (,public choice view'). To this end, the effect of government size on subjective well-being is estimated in a combined survey and country-level dataset covering 153,268 respondents from twelve EU countries over the 1990,2000 period. The first finding is an inversely U-shaped relationship between government size and well-being. In addition, the analysis suggests that given the high institutional quality as compared to other parts of the world there might be scope for a further enlargement of governments in the EU from a well-being perspective. However, one must acknowledge that the effect on well-being may be quite small and that democratic societies in Europe have no experience with even larger governments. The investigation also reveals that the impact of government size on well-being depends negatively on levels of corruption and positively on the extent of decentralization. Moreover, left-wing voters and low-income earners are the main beneficiaries of a large public sector. Finally, in all twelve EU countries included in the sample higher levels of well-being could have been achieved by allocating a higher share of public resources to education, while Finland and Germany could have given an additional boost to well-being by cutting expenditures on social protection. [source] Latin America and the Social Contract: Patterns of Social Spending and TaxationPOPULATION AND DEVELOPMENT REVIEW, Issue 4 2009Karla Breceda This article analyzes the incidence of social spending and taxation by income quintile for seven Latin American countries, the United Kingdom, and the United States. Absolute levels of social spending in Latin America are fairly flat across income quintiles, a pattern similar to that in the United States and differing from the more progressive pattern of spending in the United Kingdom. The structure of taxation in Latin America is also similar to that of the United States. Because of high income inequality in Latin America and the US, the rich bear of most the burden, whereas the United Kingdom taxes the middle class to a greater extent. The analysis suggests that many Latin American countries are trapped in a vicious cycle in which the rich resist the expansion of the welfare state (because they bear most of its tax burden without receiving commensurate benefits), and their opposition to its expansion in turn maintains long-term inequalities. [source] Party Strength, the Personal Vote, and Government SpendingAMERICAN JOURNAL OF POLITICAL SCIENCE, Issue 2 2010David M. Primo "Strong" political parties within legislatures are one possible solution to the problem of inefficient universalism, a norm under which all legislators seek large projects for their districts that are paid for out of a common pool. We demonstrate that even if parties have no role in the legislature, their role in elections can be sufficient to reduce spending. If parties in the electorate are strong, then legislators will demand less distributive spending because of a decreased incentive to secure a "personal vote" via local projects. We estimate that spending in states with strong party organizations is at least 4% smaller than in states where parties are weak. We also find evidence that strong party states receive less federal aid than states with weak organizations, and we theorize that this is because members of Congress from strong party states feel less compelled to secure aid than members from weak party states. [source] Is Post-Communist Health Spending Unusual?THE ECONOMICS OF TRANSITION, Issue 2 2000János Kornai What factors determine a country's spending on health? And what factors determine the share of spending financed by the public sector? Taking these factors into account, is post-communist health spending unusual? For the OECD economies, we find that per capita health spending is strongly related to per capita income, with an elasticity of about 1.5. The elasticity for developing economies is close to one. Spending is also positively related to the elderly dependency rate, but the relationship is weaker than a static comparison of spending by the elderly and non-elderly would suggest. Even though health spending as a share of GDP in the post-communist countries of eastern and central Europe is below the OECD average, there is evidence of above normal health spending in most countries when we control for income and demographics. For Hungary, the ,excess' spending reached over three percentage points of GDP in 1994. For the OECD sample, four development indicators account for half the variation in the public sector share of total health spending. Political variables help explain the remainder. If the post-communist countries converge to the market economy pattern, the share of public financing will fall, yet still remain well above half. [source] Cointegration, Government Spending and Private Consumption: Evidence from JapanTHE JAPANESE ECONOMIC REVIEW, Issue 2 2004Tsung-Wu Ho Assuming a CRRA preference, this paper shows that there is a cointegration restriction implied by the intra-temporal first-order condition in the consumption function. This restriction predicts a cointegrated system of government consumption, private consumption, and their relative price. Our analysis indicates that, first, Johansen's VECM confirms the theoretical prediction that is supported by the data of Japan; moreover, Bierens' (1997) nonparametric estimator severely contradicts with the theoretical model and fits the data poorly; second, Japanese people have increasing willingness to rearrange their consumption over time. Besides, the intratemporal relationship between private and government consumption remains relatively stable over time. [source] Indonesian Local Government Spending, Taxing and Saving: An Explanation of Pre- and Post-decentralization Fiscal Outcomes*ASIAN ECONOMIC JOURNAL, Issue 3 2005Blane D. Lewis H77; O18; R51 As a result of Indonesia's decentralization program, local governments have gained significantly more responsibility for service delivery, considerably larger fiscal resources, and much greater authority over the use of those resources than before. The present paper develops a simple budget model to describe and explain the substantial differences in pre- and post-decentralization local government fiscal behavior related to spending, taxing and saving. During the post-decentralization period special attention is paid to the fiscal behavior of natural resource rich regions. Among other things, the evidence suggests that: post-decentralization local government spending is partly responsive to increasing needs and partly the subject of elite capture; local government taxation has become more aggressive under decentralization and appears to be mostly driven by local bureaucratic expectations related to routine overhead budgets; and the increased savings of local governments during the post-decentralization period is determined to a large degree by delayed central government transfer payments. [source] The Intratemporal Substitution between Government Spending and Private Consumption: Empirical Evidence from TaiwanASIAN ECONOMIC JOURNAL, Issue 3 2001Ru-Lin ChiuArticle first published online: 18 DEC 200 In this paper, we investigate the idea that a general model of consumption should allow for the direct effect of government consumption. We show, given an assumed preference specification, that there is a cointegration restriction implied by an intraperiod first-order condition of the model. This restriction leads to a linear deterministic cointegrated system of government consumption, private consumption and their relative price that is consistent with the data for Taiwan. The intratemporal elasticity of substitution between government and private consumption is estimated to be about 1.1. Overall, we find consistent empirical evidence in support of our model. [source] Income Smoothing and Discretionary R&D Expenditures of Japanese Firms,CONTEMPORARY ACCOUNTING RESEARCH, Issue 2 2000VIVEK MANDE Abstract During the recent recession (1991 to present), Japanese firms decreased their spending on R&D for the first time since World War II. The decreases have raised concerns that Japanese managers may be making suboptimal allocations to R&D. We test whether Japanese managers adjust R&D based on short-term performance. Our results show that Japanese firms in several industries adjust their R&D budgets to smooth profits. Interestingly, adjustments to R&D are larger in expansion years. These results, similar to those documented with U.S. managers, point to myopic decision making by Japanese managers. [source] THE CORRELATION OF YOUTH PHYSICAL ACTIVITY WITH STATE POLICIESCONTEMPORARY ECONOMIC POLICY, Issue 4 2007JOHN CAWLEY Childhood overweight has risen dramatically in the United States during the past three decades. The search for policy solutions is limited by a lack of evidence regarding the effectiveness of state policies for increasing physical activity among youths. This paper estimates the correlation of student physical activity with a variety of state policies. We study nationwide data on high school students from the Youth Risk Behavior Surveillance System for 1999, 2001, and 2003 merged with data on state policies from several sources. We control for a variety of characteristics of states and students to mitigate bias due to the endogenous selection of policies, but we conservatively interpret our results as correlations, not causal impacts. Two policies are positively correlated with participation in physical education (PE) class for both boys and girls: a binding PE unit requirement and a state PE curriculum. We also find that state spending on parks and recreation is positively correlated with two measures of girls' overall physical activity. (JEL I18, I28) [source] Public capital formation and labor productivity growth in ChileCONTEMPORARY ECONOMIC POLICY, Issue 2 2000MD. Ramirez Following the lead of the endogenous growth literature, this article analyzes the impact on labor productivity growth of public and private investment spending in Chile. Using cointegration analysis, the results of the dynamic labor productivity function for the 1960,95 period show that (lagged) public and private investment spending, as well as the rate of growth in exports, has a positive and highly significant effect on the rate of labor productivity growth. The estimates also indicate that increases in government consumption spending have a negative effect on the rate of labor productivity growth, thus suggesting that the composition of government spending may also play an important role in determining the rate of labor productivity growth. The findings call into question the politically expedient policy in many Latin American countries of disproportionately reducing public capital expenditures to meet targeted reductions in the fiscal deficit as a proportion of GDP. [source] CONSUMING CLASS: Multilevel Marketers in Neoliberal MexicoCULTURAL ANTHROPOLOGY, Issue 3 2008PETER S. CAHN ABSTRACT Since the 1980s, Mexican leaders have followed other Latin American countries in pursuing neoliberal economic policies designed to stimulate foreign investment, reduce public spending, and promote free trade. Recent studies of indigenous movements and popular protests challenge the idea that these market-based economic reforms enjoy a broad consensus and suggest that elites impose them by force. By turning the focus to middle-class Mexicans, I argue that some nonelite sectors of society avidly welcome the reign of the free market. Although they do not profit directly from unregulated capitalism, the middle class looks to neoliberalism to ensure access to the material markers of class status. The rising popularity of multilevel marketing companies in Mexico, which glorify consumption and celebrate the possibilities of entrepreneurship, demonstrates the appeal of neoliberalism to citizens fearful of diminished purchasing power. By tying consumption to globalized free markets, neoliberalism does not need coercion to win acceptance. [source] Brazil's Bolsa Família: A Double-Edged Sword?DEVELOPMENT AND CHANGE, Issue 5 2008Anthony Hall ABSTRACT In common with most Latin American countries, as governments embrace safety nets to attack poverty, conditional cash transfer (CCT) programmes have become part of mainstream social policy in Brazil. Under president Fernando Henrique Cardoso (1995,2002), and especially since Luiz Inácio Lula da Silva took office in 2003, targeted assistance in education, health and nutrition, now united under Bolsa Família, have expanded rapidly to benefit forty-four million (24 per cent of the total population), absorbing almost two-fifths of the social assistance budget earmarked for the poorest sectors. Despite its operational problems, Bolsa Família appears to have been effective in providing short-term relief to some of the most deprived groups in Brazil. Yet it could prove to be a double-edged sword. There is a risk that, due to its popularity among both the poor and Brazil's politicians, Bolsa Família could greatly increase patronage in the distribution of economic and social benefits and induce a strong dependence on government handouts. There are also early signs that it may be contributing to a reduction in social spending in key sectors such as education, housing and basic sanitation, possibly undermining the country's future social and economic development. [source] Trade Liberalization and the Fiscal Squeeze: Implications for Public InvestmentDEVELOPMENT AND CHANGE, Issue 3 2003Barsha Khattry This article examines the impact of trade liberalization on the level and structure of government expenditures across countries, with particular emphasis on low income countries. It develops the argument that the policies employed during trade liberalization have resulted in a fiscal squeeze as a result of declining tax revenues and rising interest expenditures. To surmount this fiscal hurdle, expenditures on physical capital, which have negligible political ramifications, have been reduced. Other more politically sensitive expenditures, such as spending on social capital, have been financed by incurring additional debt. However, additional debt has exerted upward pressure on interest payments, further exacerbating the fiscal situation. The statistical analysis carried out to examine the evidence uses panel data for eighty developing and industrialized countries over the period 1970,98 and employs a fixed,effects regression framework to account for country,specific characteristics. The results indicate that trade liberalization has indeed resulted in declining revenues and higher interest expenditures and that these factors have contributed to the observed decline in infrastructure spending. [source] Plebiscites, Fiscal Policy and the Poor: Learning from US Experience with Direct DemocracyDEVELOPMENT POLICY REVIEW, Issue 5 2005Arthur A. Goldsmith Many countries are contemplating direct political participation as a way of giving marginalised people more say in national fiscal policies. The United States is a natural laboratory for studying how large-scale direct democracy actually works in this regard. Every state allows voters to decide certain ballot questions about how to raise and spend public revenue. The 100-year record shows, however, that state-wide plebiscites fail to produce uniformly equitable or financially sustainable government budgets, or to mobilise low-income groups to defend their economic interests. When called upon to make decisions about state government spending, the electorate is apt to disregard any hardship for poor people. Traditional political parties and advocacy organisations are usually a more promising avenue for promoting anti-poverty budgets. [source] Uganda: No More Pro-poor Growth?DEVELOPMENT POLICY REVIEW, Issue 1 2005Robert Kappel This article explores changing growth regimes in Uganda, from pro-poor growth in the 1990s to growth without poverty reduction, actually even with a slight increase in poverty, after 2000. Not surprisingly, it finds that good agricultural performance is the key determinant of direct pro-poor growth in the 1990s, while lower agricultural growth is the root cause of the recent increase in poverty. At the same time, after 2000 low agricultural growth appears to have induced important employment shifts out of agriculture, which have dampened the increase in poverty. The article also assesses the indirect form of pro-poor growth by analysing the incidence of public spending and the tax system, and finds that indirect pro-poor growth has been achieved to only a limited extent. [source] Liquidity and Trading DynamicsECONOMETRICA, Issue 6 2009Veronica Guerrieri In this paper, we build a model where the presence of liquidity constraints tends to magnify the economy's response to aggregate shocks. We consider a decentralized model of trade, where agents may use money or credit to buy goods. When agents do not have access to credit and the real value of money balances is low, agents are more likely to be liquidity constrained. This makes them more concerned about their short-term earning prospects when making their consumption decisions and about their short-term spending opportunities when making their production decisions. This generates a coordination element in spending and production which leads to greater aggregate volatility and greater comovement across producers. [source] Explaining stunting in nineteenth-century FranceECONOMIC HISTORY REVIEW, Issue 2 2010GILLES POSTEL-VINAY We examine the share of French men with stunted growth during the nineteenth century using data on potential army conscripts. The share of stunted men (those whose height was below 1.62 metres) in France's 82 departments declined dramatically across the century, especially in the south and west. Our models examine the role of education expenditure, health care personnel, local wages, asset distribution, and a dummy variable for Paris as determinants of stunting, decomposing changes over time into the effects of levels and returns to the various explanatory variables used in the model of heights. All covariates are strongly significant, with education spending being particularly important. Our evidence clearly indicates that living in congested Paris contributed to poor health. [source] UK Household Debt: A Threat to Growth or Stability?ECONOMIC OUTLOOK, Issue 1 2005Article first published online: 2 FEB 200 The liberalisation of credit constraints in the 1970s for UK consumers has had important implications for the housing market and consumer spending. This paper by John Muellbauer1 examines the factors that have driven soaring consumer debt and house price levels; in particular those observed since the mid-1990s. By relying on recent econometric evidence and trends in credit availability, real income per head, nominal and real after tax mortgage rates, measures of perceived risk and broad demographic trends, it also analyses the prospects for house prices, mortgage debt and unsecured debt over the coming years. The outlook is for a ,soft landing' in the housing market and associated declines in the rate of growth of consumer debt, which, although probably not smooth, does suggest the underlying situation is more benign and less crisis-prone than it was in 1988,89. [source] Mortgage credit conditions in the UKECONOMIC OUTLOOK, Issue 3 2002John Muellbauer It is widely perceived that credit conditions for UK consumers, particularly in the mortgage market, have been radically liberalized since the 1970s. The implications for the housing market and consumer spending have been important. This article by John Muellbauer draws on a 1997 paper by the author which examined data from the Survey of Mortgage Lenders to learn, from information about loan-to-value ratios of first-time buyers, classified by region, about changes in mortgage credit conditions. By controlling for economic and demographic influences on credit conditions, a single time-varying index of mortgage credit conditions was extracted from these SML data. This index rises in the 1980s, peaking towards the end of the decade. It retraces part of its rise in the early 1990s before rising again by 1995 to a level not far below the previous peak. The article considers whether more recent data suggest a further liberalisation of mortgage credit conditions. It draws on joint research with others to discuss possible implications for consumer spending, house prices, the volume of property transactions and mortgage defaults. [source] Expenditure on the NHS in PerspectiveECONOMIC OUTLOOK, Issue 3 2000Martin Chalkley In the wake of the recently-announced increases in health spending, Martin Chalkley reviews the record of health spending in the UK both historically and comparatively. It is clear that prices paid by the NHS have increased more than prices in general, and once this is allowed for then it appears that real health spending today is only twice that of 50 years ago as compared with the fourfold increase suggested when using a general price deflator. Such differential inflation is obviously not a problem which is confined to the UK, and it does add considerably to problems in making proper comparisons between levels of health spending in different countries. In spite of these difficulties, it seems that compared with many other developed countries, health spending in the UK as a proportion of GDP is modest. So, looking ahead, there is some way to go before the UK attains the levels of spending achieved in many other countries. But understanding the reasons for relative price changes is vital if any proposed increases in spending is to be translated into increases in the quantity and quality of services provided. [source] Prudence and Pragmatism in the Fiscal StanceECONOMIC OUTLOOK, Issue 2 2000Simon Proce In this article, Simon Price argues that the government is pursuing a remarkably conservative fiscal policy. Not only has demand management been left almost entirely to the MPC, but since 1997 spending has been held down while the overall tax burden has been raised. Consequently, the relative size of the national debt is declining at a rapid rate. There are rules that are intended to govern debt policy, but they are based on less sound principles than the government argues, and may be inconsistent. Oddly, despite the emphasis on these rules, the government has announced a path for spending that makes it clear that it is in fact planning not to follow them. The government may be planning to reduce the national debt at an excessive rate. This may make sense in the short run, but is more problematic in the medium to long term. This is not to say fiscal policy should be immediately relaxed; the current low levels of private sector saving may well justify a temporarily tight fiscal stance. [source] | |||||||||||||||||||||||||||||||||||||