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International Monetary Fund
The Research Summaries in the March 2014 Research Bulletin focus on efficiency of health expenditure (Francesco Grigoli and Javier Kapsoli) and employment growth in European Union countries (Bas B. Bakker and Li Zeng). The Q&A article looks at “Seven Questions on Financial Interconnectedness” (Co-Pierre Georg and Camelia Minoiu). The Research Bulletin also includes a listing of IMF Working Papers, Staff Discussion Notes, and Recommended Readings from the IMF Bookstore. Information on the IMF Economic Review—the research journal of the IMF—is also provided.
International Monetary Fund. European Dept.
This Selected Issues paper reviews recent developments in growth and employment in Bulgaria and highlights key constraints to growth suggested by cross-country competitiveness studies. Bulgaria’s GDP has grown substantially since economic and financial stabilization in 1997. The global economic crisis had a major effect on Bulgarian growth and employment. After falling by 5½ percent in 2009, real GDP has grown at a low rate, and by 2012 real GDP was still 3 percent short of its 2008 level. However, employment growth was negative during 2009–2012, and the first small uptick occurred only in 2013.
Mr. Todd D. Mattina
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Ms. Victoria Gunnarsson
This paper assesses the relative efficiency and flexibility of public spending in Slovenia compared to the advanced and new EU member states. Spending on health care, education, and social protection is relatively high in Slovenia without achieving correspondingly better outcomes. Inefficiencies appear to stem from the financing mechanisms for social services, institutional arrangements, and the weak targeting of social benefits. In addition, the composition of spending appears to be strongly tilted towards nondiscretionary items that reduce the fiscal room for maneuver. Greater flexibility is needed to facilitate the reallocation of relatively inefficient expenditure into higher priorities. In this manner, medium-term expenditure rationalization can focus on reducing inefficient outlays rather than restraining traditionally flexible components of the budget, such as public investment.
Mr. Mark A Horton
Russia, the Baltic states and the other countries of the former Soviet Union inherited health and education systems that were in need of substantial structural and financial reform. In spite of a sharp decline of real resources, this reform has barely begun. While health and education have not suffered disproportionate cuts, employment has been maintained, with real wages sharply compressed, purchases of materials reduced and energy-related spending taking a greater share of resources in many countries. Structural and financial reform would include reducing staffing and physical capacity, while increasing expenditures for materials and wages for the more highly qualified.