Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

The paper uses a new country-level, panel data set to study the effect of public sector wages on corruption. The results show that wage inequality in the public sector is an important determinant of the effectiveness of anti-corruption policies. Increasing the wages of public officials could help reduce corruption in countries with low public sector wage inequality. In countries where public sector wages are highly unequal, however, raising the wages of government employees could increase corruption. These results are robust to a wide range of empirical model specifications, estimation methods, and distributional assumptions. The relation persists when controlling for latent omitted variables, using the share of contracts in the private sector as an instrument for the public-private wage differential. Combining increases in public sector wages with policies affecting the wage distribution could help policy makers design cost-effective programs to reduce corruption in their countries.

Anticorruption --- Civil Service Reform --- Corruption --- Labor Markets --- Public Financial Management --- Public Sector Development --- Public Sector Wages --- Public-Private Wage Differential --- Social Protections and Labor --- Wages, Compensation and Benefits

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

We study the determinants of employment and wages in the public sector, using a new set of panel data for 34 LDCs and 21 OECD countries from 1972–992, by estimating equations suggested by an efficiency wage model. We find that government employment is positively associated with the relaxation of resource constraints (the revenue-to-GDP ratio and foreign financing in the case of developing countries and GDP per capita in the case of OECD countries), urbanization, the level of education, and certain countercyclical pressures for government hiring (the real effective exchange rate for developing countries and private employment for OECD countries). Certain measures of government wages are positively associated with government revenues and negatively associated with the level of education, government debt, and countercyclical pressures.

Labor --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Wages, Compensation, and Labor Costs: General --- Labour --- income economics --- Civil service & public sector --- Public employment --- Public sector wages --- Civil service --- Economic theory --- United States --- Income economics

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper examines interactions between self-interested agents in a two-tier government hierarchy, consisting of a central authority and bureaucrats in a two-stage game, where the actions of agents affect private sector allocations. Conditions under which lower-tier corruption arises as an equilibrium characterization of the game are identified. If bureaucratic corruption sufficiently reduces the tax base, policies that deter corruption may be optimal. When monitoring is expensive or ineffective, lower-level corruption arises as equilibrium. Tax farming and the sale of offices can occur in these equilibria. In addition, strategic complementarities between bureaucrats may give rise to multiple equilibria.

Labor --- Taxation --- Criminology --- Noncooperative Games --- Organizational Behavior --- Transaction Costs --- Property Rights --- Bureaucracy --- Administrative Processes in Public Organizations --- Corruption --- Wages, Compensation, and Labor Costs: General --- Taxation, Subsidies, and Revenue: General --- Corporate crime --- white-collar crime --- Labour --- income economics --- Public finance & taxation --- Tax incentives --- Wages --- Public sector wages --- Crime --- France --- Income economics --- White-collar crime

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper argues that the development of human capital in the public sector should be an important ingredient in any proposed set of “second-generation” reforms for Africa. In the post-colonial era the quality of governance has seriously declined, and the stock of human capital in the public sector has been eroded by a flight of human capital from many countries in response to compression of wages. The paper develops a simple theoretical framework to discuss these issues and the continent’s experience with foreign technical assistance in supplementing the low level of domestic human capital.

Labor --- Macroeconomics --- Structure, Scope, and Performance of Government --- International Migration --- Wage Level and Structure --- Wage Differentials --- Economywide Country Studies: Africa --- Wages, Compensation, and Labor Costs: General --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- Public Enterprises --- Public-Private Enterprises --- Labour --- income economics --- Civil service & public sector --- Human capital --- Public sector --- Wages --- Public sector wages --- Real wages --- Economic sectors --- Finance, Public --- Ghana --- Income economics

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

It is now well established that political and institutional factors matter for fiscal outcomes. Following a review of the literature, this paper examines the relationship between a variety of political-institutional variables and fiscal aggregates-encompassing the overall balance as well as expenditure and revenue and their various components-across 19 industrial countries over the past two decades. It finds strong effects on fiscal policy from such factors as type of electoral system, degree of legislative or government fragmentation, and stability of government. Some of the strongest results emerge for certain components of expenditure, such as transfers, and for the balance between labor and consumption taxation. There are clear relationships between the type of political system and choice of tax and expenditure system. The paper also examines fiscal adjustment since the late 1980s in light of these political factors, finding some evidence of a reversal in trend, but only when growth has been high or when debt has become problematic.

Labor --- Macroeconomics --- Public Finance --- Taxation --- Fiscal Policy --- National Budget, Deficit, and Debt: General --- National Government Expenditures and Related Policies: General --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Wages, Compensation, and Labor Costs: General --- Public finance & taxation --- Welfare & benefit systems --- Labour --- income economics --- Expenditure --- Fiscal policy --- Labor taxes --- Public sector wages --- Fiscal consolidation --- Taxes --- Expenditures, Public --- Income tax --- Wages --- United States --- Income economics