Mr. Ehtisham Ahmad, Mr. Giorgio Brosio, and Mr. Vito Tanzi
There is a widespread presumption that decentralization improves public service provision. This has led to policy prescriptions that are assiduously adhered to by countries and international. This paper reviews the recent evidence from OECD countries-which is seen to be inconclusive. This suggests the need for a careful design of programs that take into account the political economy constraints and incentives, as well as more systematic and thorough evaluations of outcomes.
This Selected Issues paper attempts to quantify the impact of the demographic shift on growth and public finances in Switzerland. It examines the intertemporal consistency between current policy plans and unfunded liabilities, focusing primarily on social security, and explores policy options. It finds that so far, the impact of aging on the economy has been moderate. The number of pensioners has risen in recent years, but this is mainly owing to early retirees taking advantage of the generous disability and pension systems. The paper also examines the need for health care reforms in Switzerland.