Unproductive Public Expenditures
A Pragmatic Approach To Policy Analysis

Conclusions and Some Pragmatic Suggestions for Policy Formulation

Together with efforts to mobilize revenue, public expenditure policy is at the core of any successful effort to achieve efficient and equitable adjustment. Focusing only on revenue policy is not enough. Nor is it sufficient, even from a macroeconomic perspective, to focus only on the level of public expenditure. Public expenditure productivity has critical implications for fiscal adjustment, particularly as the competition for limited public resources intensifies. Public expenditure policy issues, including those relating to the efficiency of public expenditures and public expenditure composition, are vital for efficient and sustainable fiscal adjustment.


The following conclusions can be derived from the consideration of the economic implications of unproductive public expenditures.

Some Pragmatic Suggestions for Policy Formulation

From the preceding analysis, it is possible to identify some practical steps for identifying unproductive expenditures and improving overall expenditure productivity. It should be noted that the steps enumerated below are by no means exhaustive. Rather, they are meant to illustrate to policymakers that simple yardsticks can yield economically meaningful results when, owing either to data or time constraints, or both, a comprehensive analysis is not possible.