Managing Public Expenditure : Some Emerging Policy Issues and a Framework for Analysis

Van den Noord and Atkinson focus their analysis on public expenditure. They review public expenditure trends and examine public expenditure policies from three points of view (macroeconomic sustainability, allocative efficiency and technical efficiency). They discuss the experiences of OECD countries with reforms aimed at improving the cost-effectiveness of public expenditure. They acknowledge the important role of fiscal transparency in improving the quality of the policy debate and examine the OECD's effort in this area. Van den Noord and Atkinson note that transparency can strengthen fiscal rules. While a government cannot commit itself or a successor to respecting the rules it has introduced, it can create a policy environment that pushes future governments to respect sound fiscal criteria. They also point to the usefulness of medium-term fiscal frameworks and to the need to monitor public bodies outside the budgetary process and to apply a hard budget constraint to lower levels of government