Raising Greece's Potential Output Growth

JT00177642Revamping fiscal relations across levels of government is of paramount importance in supporting fiscal consolidation and public sector effectiveness. This paper analyses a number of problems, including regulations that limit local governments' ability to innovate and respond to local citizens' preferences, the inefficient system of intergovernmental grants, the complex structure of local taxes and fiscal rules which are too lenient to secure fiscal discipline. The paper concludes that the grant system should be reformed to promote local governments' incentives to introduce innovations so as to better respond to needs at lower cost. Barriers to the effective use of sub-national governments' taxing powers should be removed while efforts should be made to keep the tax system as simple and neutral as possible. Existing fiscal rules and market instruments should be hardened. This would require that the central government state clearly that it will not intervene as a lender of last resort to local government and ensure adequate information on local governments' outstanding and implicit liabilities is available.JEL classification: HI, H2, H7, R58.Keywords: Fiscal federalism, local government, intergovernmental grants, fiscal discipline, Japan. Optimiser l'impact de la décentralisation au JaponLa réforme des relations financières entre l'État et les collectivités territoriales est essentielle pour soutenir le processus d'assainissement budgétaire et l'efficacité du secteur public. Ce document met en lumière un certain nombre de problèmes, notamment les réglementations qui limitent la capacité des collectivités territoriales à innover et à répondre aux préférences des citoyens, un système inefficace de transferts intergouvernementaux, une fiscalité locale excessivement complexe et des règles budgétaires trop laxistes. Ce document conclut qu'une réforme du système des transferts est nécessaire pour inciter les collectivités territoriales à innover afin de répondre mieux et à moindre coût aux besoins des citoyens. Les dispositions institutionnelles qui limitent l'utilisation effective des pouvoirs des collectivités territoriales en matière d'impôts doivent être éliminées tout en s'assurant que le système fiscal soit le plus simple et le plus neutre possible. Les règles budgétaires en vigueur doivent être rendues plus strictes et le fonctionnement des marchés financiers amélioré. Cela requiert que l'État annonce clairement qu'il ne jouera pas le rôle de préteur en dernier ressort en cas de difficultés financières des collectivités territoriales et qu'il s'assure de la qualité des informations concernant leurs engagements explicites et implicites.Classification JEL : HI, H2, H7, R58.

Getting the Most Out of Public Sector Decentralisation in Japan

Joumard

Yokoyama

2005

The Labour Market in Korea

Jones

2005

This paper analyses the increasing dualism in the Korean labour market and the need to encourage greater labour force participation. Although the rising proportion of non-regular workers lowers labour costs and increases employment flexibility, it has a negative impact on both equity and efficiency over the long term. Relaxing employment protection for regular workers and increasing the coverage of the social safety net for non-regular workers would help limit the extent of dualism. Population ageing is projected to be exceptionally rapid in Korea, leading to a significant decline in the workforce by mid-century. Steps to boost the participation of women through family-friendly policies are a priority. It is also important to encourage employees to stay at firms beyond the age of 50. Making the wage system more dependent on productivity and less on seniority and implementing a company pension system in place of the retirement allowance would help maintain the employment of older persons. This Working Paper relates to the 2005 OECD Economic Survey of Korea (www.oecd.org/eco/surveys/korea).

Balancing Health Care Quality and Cost Containment

Bibbee

Padrini

2006

Balancing health care quality and cost containment: the case of Norway In recent years, a series of wide-ranging reforms designed to make greater use of market mechanisms has succeeded in eliminating shortages, raising efficiency and improving citizen satisfaction. Nevertheless, spending accelerated after the reforms, and per capita spending on health is now one of the highest in the OECD. Centralisation of hospital ownership may have increased political influence, encouraging spending that cannot be justified on cost-benefit grounds. Co-payments by patients are modest, and the background of swelling oil wealth may have sapped willingness to control costs. Diagnosis related group (DRG) procedures are arguably too well-remunerated in some areas, leading to supply-driven interventions, while their absence in others (e.g. psychiatry) may have resulted in sub-optimal supply. Generalist doctors have a gatekeeper role, but are said to over-refer patients to hospitals. Although cost controlling mechanisms exist in Norway, they are too often sidestepped by pressure by citizens on politicians to approve new drugs and treatments. Thus, future health reforms in Norway should concentrate on value for money. This paper relates to the 2005 OECD Economic Survey of Norway (www.oecd.org/eco/survey/norway).