## From Expenditure Consolidation to Expenditure Efficiency: Addressing Public Expenditure Pressures in Lithuania

_IMF Working Papers, December 28, 2015_

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## Bibliographic details
- Authors: David Coady, Nan Geng
- Published: December 28, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513590554.001

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### Summary and scope
- Reviews public expenditure in Lithuania to identify areas where deeper structural reforms may be warranted to improve spending efficiency and contain future spending pressures.
- Benchmarks spending in Lithuania against other European countries focusing on:
  - spending levels,
  - spending composition,
  - spending outcomes,
  - for both economic and functional spending classifications.
- Notes that recent expenditure consolidation efforts have kept public spending among the lowest in Europe.
- Argues that a transition from broad-based measures to more structural measures will be required to:
  - ensure that low spending levels remain sustainable,
  - address poor social outcomes such as high inequality and poor health and education outcomes,
  - efficiently and equitably contain spending pressures arising from an ageing population.

### Key findings (as reported)
- Lithuania’s public spending is among the lowest in Europe following recent expenditure consolidation efforts.
- Benchmarking reveals areas of concern across:
  - spending levels,
  - spending composition,
  - spending outcomes.
- Social outcomes highlighted for improvement include:
  - high inequality,
  - poor health outcomes,
  - poor education outcomes.
- Demographic pressures noted: an ageing population will create spending pressures that need efficient and equitable containment.

### Analytical focus and methodology
- Comparative benchmarking against other European countries.
- Analysis conducted for both economic and functional classifications of spending.
- Emphasis on identifying structural reform opportunities to improve spending efficiency rather than solely relying on broad-based consolidation.

### Policy implications and recommendations (high-level)
- Shift from broad-based consolidation measures toward more structural reforms to:
  - sustain low spending levels,
  - improve social outcomes (inequality, health, education),
  - manage ageing-related spending pressures in an efficient and equitable manner.

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/from-expenditure-consolidation-to-expenditure-efficiency-addressing-public-expenditure-43496_