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Public Spending and the Role of the State
History, Performance, Risk and Remedies


  • Author: Ludger Schuknecht, Organisation for Economic Cooperation and Development (OECD)
  • Date Published: November 2020
  • availability: Available
  • format: Paperback
  • isbn: 9781108791700

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About the Authors
  • Given high government spending, debt and the new challenges on the horizon, the themes of this work are more relevant than ever: the essential tool of spending by the state, its 'value for money', likely risks in the future, and the remedies to create lean, efficient and sustainable government. This book takes a holistic and international approach, covering most advanced countries, and discusses a historical overview of public expenditure, from the nineteenth century to the modern day, as well as future challenges. It sees the government's role as providing sound rules of the game and essential public goods and services. In presenting the relevant arguments, information and policy recommendations through comprehensive tables, charts and historical facts, the book addresses a broad readership, including students, professionals and interested members of the public.

    • Provides a current international, historical overview and comparison of public expenditure, expenditure efficiency, fiscal risks and remedies
    • Synthesises contemporary scholarship to create a panoramic, conceptual, empirical and policy-oriented view of public expenditure and the role of the state
    • Discusses a key policy topic of our time placing emphasis on a long-term 'bigger picture' approach
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    Reviews & endorsements

    'Ludger Schuknecht has provided a forceful and forensic examination of longer-term trends in the development of the fiscal state, coupled with a judicious survey of different measures for assessing the effectiveness of expenditure. The appeal for a rules-based approach, and the warning on the long-term consequences of higher debt levels, is more important than ever.' Harold James, Princeton University

    'In many industrialised countries, people expect more and more from their governments. This has led to pressures on government finances - in particular, growing levels of public debt and a crowding out of public investment by growing social expenditure. Ludger Schuknecht's book is a fascinating description and analysis of these trends. It should be read by both policymakers and academics.' Clemens Fuest, Institute for Economic Research

    'This is a most timely volume on the role of the public sector in modern societies, comprehensive and well researched. Ludger Schuknecht, who has a solid experience in economic policymaking, presents a panoramic view of the enormous growth of public expenditures in the past 150 years and of the wide scope of present-day government activities. A major strength of the book is its consistent use of cross-country comparisons, demonstrating wide differences in the size and performance of the public sector. He asks the fundamental question: what should governments do and how should they do it? And he dares to provide an answer to this highly contentious issue. In sum, this a comprehensive and balanced account that deserves serious attention - by social scientists as well as by all camps across the political spectrum.' Lars Jonung, Lund University

    'This wonderful book deals with the growing role of public expenditure, and the function of governments as such. It is comprehensive, covering all OECD countries and overseeing a long period of time. A very rich set of data is presented in terms of graphs and tables, and the author's profound knowledge of economic theory at the same time offers a framework for understanding and evaluating a complex reality. For those who want to understand the basic trends of our time, the book is a must-read.' Hans-Werner Sinn, Ludwig Maximilian's University, Munich, Former President of IFO

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    Product details

    • Date Published: November 2020
    • format: Paperback
    • isbn: 9781108791700
    • length: 260 pages
    • dimensions: 150 x 230 x 20 mm
    • weight: 0.48kg
    • availability: Available
  • Table of Contents

    Part I. The Growth of Government:
    1. The Growth of Government Expenditure Over the Past 150 Years
    2. The Composition of Expenditure
    3. Financing Government
    Part II. Value for Money:
    4. Government Performance and Efficiency
    5. Reforming Public Expenditure
    6. The Optimal Size of Government
    Part III. Fiscal Risks:
    7. Social Expenditure and the Risk of 'Social Dominance'
    8. Fiscal–Financial Risks 1: Interest Rate, Asset Markets and Real Economy Channels
    9. Fiscal–Financial Risks 2: Bank, Shadow Bank, Central Bank and International Channels
    Part IV. Remedies:
    10. Rules and Institutions
    11. Conclusions and Epilogue
    Table of Data Sources

  • Author

    Ludger Schuknecht, Organisation for Economic Cooperation and Development (OECD)
    Ludger Schuknecht is co-author of Public Spending in the 20th Century (2000), previously working as Deputy Secretary General of the OECD and Chief Economist of the German Federal Ministry of Finance.

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