1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Controlling Public Spending in Iceland

This paper analyses the main features of Iceland’s public expenditure and addresses some key policy issues. While overall public spending is not high compared with Iceland’s Nordic neighbours, other OECD countries have made more progress in reining it in. Budget consolidation efforts and public-sector reforms temporarily reversed the upward trend in the government expenditure-to-GDP in the 1990s, but since then the ratio has edged up again. This highlights the need for enhancing spending control through further reforms. Indeed, although the expenditure management system has undergone significant changes over the past ten years or so, much remains to be done to increase budgetary discipline and improve the system’s ability to contain social-spending pressures, which will intensify as the population ages. In particular, weaknesses that need to be addressed would seem to relate to the budget process and the lack of a medium-term expenditure policy, along with insufficient performance ...

English

Keywords: public expenditure, Iceland, public management, budget systems, public sector efficiency
JEL: H11: Public Economics / Structure and Scope of Government / Structure, Scope, and Performance of Government; H51: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Health; H57: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Related Policies: Procurement; H72: Public Economics / State and Local Government; Intergovernmental Relations / State and Local Budget and Expenditures; H52: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Education; H53: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Welfare Programs; H55: Public Economics / National Government Expenditures and Related Policies / Social Security and Public Pensions; H61: Public Economics / National Budget, Deficit, and Debt / National Budget; Budget Systems
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