- ISSN :
- 1815-1973 (online)
- DOI :
Public Spending Efficiency in the Czech Republic
Fiscal Policy Framework and the Main Spending Areas of Pensions and Healthcare
- Publication Date
- 21 Dec 2011
- Bibliographic information
Show Abstract /
The ongoing fiscal consolidation, spending pressures and an already relatively high average tax burden necessitate public sector efficiency improvements. There is scope for improvement in the management of government spending, mainly by enhancing transparency, introducing performance-oriented budget indicators at both central and local levels, improving the management of state-owned enterprises and developing the procurement practices of the public sector.
Legislated increases in the retirement age will improve pension system sustainability. A new defined contribution tier is being introduced which should help to diversify future retirement income. At the same time, there is uncertainty about the number of participants who will decide to divert their contribution to the new tier and hence about the implications for revenues in the existing defined benefit pension tier. Also, attention should be taken regarding administrative costs of the new tier, since these can have a significant impact on future replacement rates and therefore public support for it. With more emphasis on private savings, the financial literacy of the population also needs to be stepped up.
In healthcare the authorities plan to continue improving the multi-insurer model through incremental reforms such as limiting pharmaceutical costs and improving provider-payment system. The potential for efficiency improvement in healthcare network planning and better care management should be explored, while ensuring that insurers and health providers are given the correct incentives.
This working paper relates to the 2011 Economic Survey of the Czech Republic, www.oecd.org/eco/surveys/czech.
- pensions, fiscal frameworks, health care, budgets, public finances, Czech Republic, local governments
- JEL Classification:
- H51: Public Economics / National Government Expenditures and Related Policies / Government Expenditures and Health
- H55: Public Economics / National Government Expenditures and Related Policies / Social Security and Public Pensions
- H57: Public Economics / National Government Expenditures and Related Policies / Procurement
- H61: Public Economics / National Budget, Deficit, and Debt / Budget; Budget Systems
- H72: Public Economics / State and Local Government; Intergovernmental Relations / State and Local Budget and Expenditures