Enhancing the Effectiveness of Public Spending in Norway

2002 
Public spending is very high in Norway, partly reflecting an extensive coverage of the welfare system and ambitious regional development objectives. Moreover, several institutional features contribute to dampening the cost-effectiveness of many public-spending programmes. Abundant oil revenues have so far mitigated strains on public finance. However, coping with the depletion of oil resources and the fiscal consequences of ageing would require to increase the cost-effectiveness of many public spending programmes, while leaving some room to cut the high tax-to-GDP ratio. This paper identifies the main sources of inefficiencies and suggests policy options. These include: supplementing the existing deficit rule by an expenditure rule; increasing flexibility in public sector wages and job tenure; reforming the funding system of local governments; raising the contestability of public service provision; intensifying the use of price signals and improving incentives to reduce the ... Ameliorer l'efficacite des depenses publiques en Norvege Les depenses publiques sont tres elevees en Norvege, refletant en partie une large couverture du systeme de protection sociale et d’ambitieux objectifs de developpement regional. En outre, certaines dispositions institutionnelles ne favorisent pas l’efficacite-cout de nombreux programmes de depenses publiques. Les abondantes recettes petrolieres ont limite jusqu'a present les tensions sur ces depenses. Cependant, pour faire face a l'epuisement des ressources petrolieres et aux consequences du vieillissement de la population, il faudrait ameliorer l'efficacite-cout de plusieurs programmes de depenses, tout en laissant une certaine marge de manœuvre a la reduction du taux de prelevement obligatoire qui est actuellement d'un niveau eleve. Ce document de travail identifie les principales sources d’inefficacite et propose des solutions pour y remedier. Il s’agit en particulier d’introduire une regle budgetaire sur les depenses publiques pour completer celle en vigueur sur le deficit ...
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