Do Government Wage Cuts Close Budget Deficits? : A Conceptual Framework for Developing Countries and Transition Economies
Real wage declines have been common in the public sector in many countries over substantial periods of time. In several cases, such wage reductions have coincided with a decline in the efficiency of the public sector. In a simple analytical framework, it is shown that higher wage levels alter the incentive compatible equilibrium by attracting relatively skilled human capital to the government sector, which raises the quality of public output--tax revenue collection in this paper. Increases in wages should be complemented with appropriate monitoring and penalty rates for effective tax administration; prescriptions of raising the statutory tax rate alone, however, may not increase revenue collection
Year of publication: |
1996
|
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Institutions: | International Monetary Fund ; International Monetary Fund (contributor) |
Publisher: |
Washington, D.C : International Monetary Fund |
Subject: | Entwicklungsländer | Developing countries | Haushaltsdefizit | Budget deficit | Öffentliche Schulden | Public debt | Systemtransformation | Economic transition | Transformationsstaaten | Transition countries |
Saved in:
freely available
Extent: | Online-Ressource (40 p) |
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Series: | IMF working papers. - Washington, DC : IMF, ZDB-ID 2108494-4. - Vol. Working Paper No. 96/19 |
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Arbeitspapier ; Working Paper |
Language: | English |
ISBN: | 1-4519-2255-8 ; 978-1-4519-2255-4 |
Other identifiers: | 10.5089/9781451922554.001 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014396160
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