Recent Experiences of Countries in Reforming the Government

Abstract

In previous chapters of this study, it was shown that the rapid growth in public spending in recent decades did not generate clearly identifiable achievements in social and economic objectives. Declining returns to government growth or, in some cases, even negative returns (in terms of socioeconomic objectives) suggest that a smaller economic role for the state would be desirable in the future. With major reforms, and once the full effects of these reforms are felt, government spending could come down significantly. To achieve this radical change, governments would need to focus on setting the rules of the game and on pursuing their core objectives in an efficient manner. They would have to shed many of the responsibilities they assumed in recent decades. In Part Three we provided some guidelines for reforming fiscal rules and institutions and for streamlining public expenditure programs. Although we do not claim that these guidelines provide precise instructions on how to solve the problems that have justified big government in the past, we hope that they can provide a useful brief for a debate on what could be done to achieve more efficient governments with much lower levels of public spending. The following chapters illustrate how much public policies and public opinion have changed since the 1970s. Government reform is not just a mind game for eccentric academics, but it is a process that is already well advanced or gaining momentum in some countries.