Austerity vs. growth: It's more about spending wisely than spending more
Source: Courtesy of INSEAD Knowledge , Author: Amine Ouazad
Posted: Wed May 16, 2012 5:06 pm

INTERNATIONAL. François Hollande implicitly assumes that austerity and growth are incompatible. Yet, a common misunderstanding nowadays is that austerity programs and high quality public services are inconsistent.

But countries spending the most on healthcare and education — the latter being essential to the competitiveness of European nations in international trade --  are not necessarily the ones with the best healthcare and the best schools. France ranks 11th in spending on education as a percent of GDP while Germany ranks 29th.

However, German students rank much higher than French students in reading, mathematics, and science in the latest international OECD assessments.

Also, Germany has a high performing apprenticeship scheme in secondary schools that contributes to the strength of German exports. In a word, it is more about spending wisely than spending more.

Note: Amine Ouazad is INSEAD Assistant Professor of Economics and Political Science.

This article is republished courtesy of INSEAD Knowledge

Copyright INSEAD 2012

RELATED ARTICLES

French elections analysis: A matter of different emphasis and degree

French elections analysis: Let's hope Hollande was lying to get elected

Austerity vs. Growth - A false choice, says Christine Lagarde

 

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: August 21, 2017
UAE. As the population growth rates increase, not only are fears of over supply unfounded, rather there is a significant possibility of sustained under supply as Dubai continues its expansion plans towards achieving its goals of the World Expo 2020 and beyond.
date:Posted: August 21, 2017
UAE. According to MEED Projects, just US$56bn worth of contracts were awarded in H1 2017 compared with US$69bn over the same period in 2016; Long-term prospects bright with over US$2 trillion of known active projects in the pipeline across the GCC.
date:Posted: August 18, 2017
UAE. As many as 292 tenders with an estimated value of US$9.5 billion were awarded in Q2, while the total value of urban construction project awards set to reach US$50.9 billion in 2017, according to BNC Network.
dhgate