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This paper argues that the development of human capital in the public sector should be an important ingredient in any proposed set of “second-generation” reforms for Africa. In the post-colonial era the quality of governance has seriously declined, and the stock of human capital in the public sector has been eroded by a flight of human capital from many countries in response to compression of wages. The paper develops a simple theoretical framework to discuss these issues and the continent’s experience with foreign technical assistance in supplementing the low level of domestic human capital.

Labor --- Macroeconomics --- Structure, Scope, and Performance of Government --- International Migration --- Wage Level and Structure --- Wage Differentials --- Economywide Country Studies: Africa --- Wages, Compensation, and Labor Costs: General --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- Public Enterprises --- Public-Private Enterprises --- Labour --- income economics --- Civil service & public sector --- Human capital --- Public sector --- Wages --- Public sector wages --- Real wages --- Economic sectors --- Finance, Public --- Ghana

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The paper investigates the relationship between labor taxation and unemployment in Sweden by estimating a labor market model that includes a wage-setting locus and labor demand and supply relationships. The study simulates the effect of a 1 percentage point increase in the payroll tax and in total tax rates. The increase in the payroll tax pushes up labor costs by about ½ percent over a 5–10 year time horizon. Hours worked fall by 0.5 percent and the unemployment rate rises by 0.3 percentage point. The increase in total tax rates generates a similar result. Therefore, it appears that increases in taxes have adversely affected employment and unemployment in Sweden.

Labor --- Taxation --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Wages, Compensation, and Labor Costs: General --- Demand and Supply of Labor: General --- Labour --- income economics --- Public finance & taxation --- Welfare & benefit systems --- Payroll tax --- Real wages --- Labor markets --- Labor taxes --- Wages --- Taxes --- Fiscal policy --- Labor market --- Income tax --- Sweden

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This Selected Issues paper explores the determinants of Greece’s potential output, an exercise that could shed light on its current cyclical position, as well as on its medium-term growth prospects. To that end, a production function is estimated, with capital and labor as factors of production and time-varying total factor productivity. The estimation results suggest that the output gap has been closing in recent years, with output projected to be slightly above potential in 1998. The paper also explores the impact of changes in the drachma’s exchange rate on inflation.

Foreign Exchange --- Inflation --- Labor --- Macroeconomics --- Production and Operations Management --- Macroeconomics: Production --- Price Level --- Deflation --- Wages, Compensation, and Labor Costs: General --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Labour --- income economics --- Currency --- Foreign exchange --- Public finance & taxation --- Total factor productivity --- Output gap --- Potential output --- Exchange rates --- Prices --- Real wages --- Economic theory --- Wages --- Industrial productivity --- Greece

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This Selected Issues paper on Sweden reviews economic developments in Sweden during 1994–98. In 1994, the general government expenditure-to-GDP ratio stood at 70 percent, up from below 60 percent of GDP in the late 1990s; meanwhile, the revenue ratio was just under 60 percent of GDP, down from about 65 percent of GDP in the late 1980s. On the expenditure side, transfers to households accounted for 37 percent of general government expenditure in 1994, subsidies and other transfers to businesses 10 percent, consumption 39 percent, investment 4 percent, and interest payments 10 percent.

Labor --- Macroeconomics --- Public Finance --- Taxation --- Demography --- Wages, Compensation, and Labor Costs: General --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Social Security and Public Pensions --- Nonwage Labor Costs and Benefits --- Private Pensions --- Demand and Supply of Labor: General --- Labour --- income economics --- Pensions --- Public finance & taxation --- Welfare & benefit systems --- Real wages --- Wages --- Pension spending --- Payroll tax --- Expenditure --- Taxes --- Fiscal policy --- Labor market --- Income tax --- Sweden

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This Selected Issues paper and Statistical Appendix analyzes Germany’s past fiscal policy behavior and assesses the likely adjustments that would be necessary to bring future fiscal policy behavior in line with European Monetary Union and the Stability and Growth Pact requirements. Using estimated fiscal policy reaction functions that take account Germany’s decentralized fiscal decision-making structure, the statistical results suggest that discretionary fiscal policy at the general government level has maintained a procyclical stance since the end of the 1970s. The paper also examines disaggregated labor market developments in Germany.

Labor --- Macroeconomics --- Public Finance --- Taxation --- Production and Operations Management --- Fiscal Policy --- Wages, Compensation, and Labor Costs: General --- Demand and Supply of Labor: General --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Labour --- income economics --- Welfare & benefit systems --- Public finance & taxation --- Fiscal policy --- Labor markets --- Real wages --- Labor market --- Economic theory --- Income tax --- Germany