GOVERNMENT SPENDING IN DEVELOPING COUNTRIES: Trends, Causes, and Consequences

Throughout the twentieth century governments have been spendingever larger proportions of national income. Three issues arisein discussions about the growth of such spending as it pertainsto developing countries: How does it compare with expenditurein industrial nations? What explains the growth in spendingby developing country governments? And what are the effectson economic growth? Government expenditure as a share of GDPin low- and middle-income countries, on average, is lower thancomparable shares in industrial market economies and, with fewexceptions, is growing. Many factors, including ideology, demographics,a positive income elasticity for public goods, the rising costof public goods relative to private goods, and perhaps developmenttheory and practice, explain this growth. As for the relationshipbetween government expenditure and economic growth, the empiricalevidence does not reveal any strong correlation. The size ofgovernment may engender strong ideological debate, but the positionthat the aggregate level of government expenditure is a significantdeterminant of growth rates receives little support.      

GOVERNMENT WAGE POLICY IN AFRICA: Some Findings and Policy Issues

This article documents recent trends in government wage andemployment levels for a number of African countries and challengesthe conventional wisdom that public wages are too high in Africa.Although most countries have significantly adjusted the realwages of government workers over the past decade, considerablevariance in cross-country experience with regard to governmentwage levels, wage structures, and employment growth is evident.On the basis of the observed trends, the article calls for amore microeconomic focus on the relationship between governmentpay and employment policies and on the real consequences ofsuch policies on the government's ability to provide goods andservices.      

Economic Analysis in Plain English: A Course in Economic Journalism

The authors describe an experimental economics course designed as a journalism workshop. Students were reporters, writing articles on economic events and issues and about prominent economists and their ideas. The articles were read and discussed by the entire class. The requirement to explain economics to lay readers clearly but accurately developed the students' own economic literacy.     

DOES INDONESIA HAVE A 'LOW PAY' CIVIL SERVICE?

Government officials and policy analysts maintain that Indonesia's civil servants are poorly paid, and have been for decades, a conclusion that is supported by anecdotal evidence and casual empiricism. In this paper, the relationship between government and private compensation levels is systematically analysed using evidence from two large household data sets, the 1998 Sakernas and the 1999 Susenas. The results suggest that government workers with a high school education or less, representing three-quarters of the civil service, earn a pay premium over their private sector counterparts. Civil servants with more than a high school education earn less than they would in the private sector but, on average, the premium is far smaller than is commonly alleged, and is in keeping with public/private differentials in other countries. The results prove robust to varying econometric specifications and cast doubt on the proposition that low pay is an explanation for government corruption.