Work detail

Evaluating the Dynamics of the Public Sector

Author: Mgr.Jan Kubín
Year: 1997 - summer
Leaders: prof. RNDr. Jiří Hlaváček CSc.
Consultants:
Work type: Finance and Banking
Masters
Language: Czech
Pages: 74
Awards and prizes: Economics Foundation Award
M.A. with distinction from the Dean of the Faculty of Social Sciences for an extraordinarily good masters diploma thesis
Link:
Abstract: This diploma thesis analyses the public sector in a relatively broad sense. It focuses on several areas that have been so far relatively underdeveloped in the Czech academic environment. It has four main topics: 1. Definition and measurement of the size of public sector, 2. Historic overview and theories of public sector's growth, 3. Methods for analysis of public budgets, 4. Comparison of public budgets of the Czech Republic with developed countries.
The first section, explaining definition and measurement of public sector, enables the reader to understand available statistics on Czech public budgets, highlights specific features of Czech reports, and provides help the data in order to compare them with other countries.
Historic overview describes gradual increase of public sector from the period of "minimum-size" state before WW1, increase of state budgets importance during WW1 and WW2, and as a result of J. M. Keynes theories, up to current attempts (not always successful) to get public budgets deficits under control and reduce overall taxation.
The next section describes theories that attempts to explain the growth of the public sector, and to formulate some explicit mathematical relationships. This includes the Wagner Law, Musgrave's hypotheses, or the Peacock-Wiseman hypotheis
Growth theories are followed by a section dealing with different methods of public budgets` analysis. This means a shorter-term and more practical view on budgets that is needed for evaluation and formulation of the fiscal policy. Various indicators and ratios are used for this purpose, such as total taxes as percentage of GDP, share of different types of government expenditures on total budget, or special indicators including structural and cyclical deficit, and trend budget. The author also proposes a new vector method for comparison of the structure of revenues and expenditures over time, and among countries.
The last section presents a comparison of Czech public budgets with developed EU countires, using the above mentioned indicators. It shows that the total size of Czech public sector still appears to be above EU average, and that the structure of the tax system is quite different. On the other hand, the structure of expenditures appears already relatively similar.



Downloadable: Diploma Thesis - Kubín

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