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.

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Next Steps for Public Spending in New Zealand

The Pursuit of Effectiveness

This paper reviews public expenditure in New Zealand and the scope for further progress. Since the mid-1980s, New Zealand has been a world leader in public management reforms. Government agencies have been transformed by delegating managerial responsibility to them and replacing input controls with an output-based budgeting and management approach. The adoption of a medium-term top-down fiscal management framework contributed to a large reduction in public debt. But while the system is good at producing outputs cheaply and often in innovative, responsive, and customer-driven ways, it is not as good at choosing what to produce in the first place (i.e. technical versus allocative efficiency). This reflects insufficient evaluation of programmes, not enough focus on managing for outcomes, and a budget that is excessively fragmented. The quality of spending could also be improved by a greater willingness to extend the use of market-based mechanisms, including usercharges, competition ...


Keywords: public management, fiscal transparency, welfare programmes, government expenditure
JEL: H1: Public Economics / Structure and Scope of Government; H4: Public Economics / Publicly Provided Goods; I28: Health, Education, and Welfare / Education and Research Institutions / Education: Government Policy; H6: Public Economics / National Budget, Deficit, and Debt; H5: Public Economics / National Government Expenditures and Related Policies; H0: Public Economics / General; I38: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Welfare, Well-Being, and Poverty: Government Policy; Provision and Effects of Welfare Programs
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