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: July 7, 2015
UAE. The price action of Dubai's real estate market will be greatly influenced by the rate of completion of on-going projects. If the rate falls below 60%, the lopsidedness will cause prices to trend upwards.
date:Posted: July 7, 2015
UAE. PA Consulting Group says failure to grasp how to communicate with this entrepreneurial group of people may threaten the survival of organisations reluctant to change; Three-point strategy to help regional employers avoid shortage of new talent in new era of digital revolution.
date:Posted: July 7, 2015
UAE. Central Bank of Malaysia, one of the largest issuers of sukuk worldwide, stopped issuing earlier this year; The pullback saw total sukuk issuance drop by 42.5% compared with the same period a year earlier.
UAE. PA Consulting Group says failure to grasp how to communicate with this entrepreneurial group of people may threaten the survival of organisations reluctant to change; Three-point strategy to help regional employers avoid shortage of new talent in new era of digital revolution.
dhgate