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: April 27, 2017
INTERNATIONAL. If history shows us that science has spawned so many unintended discoveries, what is around the next corner of unintended scientific breakthroughs?
date:Posted: April 27, 2017
SAUDI ARABIA. Increase in foreign direct investment seen as part of efforts to diversify the economy and boost investment inflows into the kingdom; National Transformation Programme updates to be revealed at Saudi Forum 2017.
date:Posted: April 26, 2017
UAE. New PwC report finds an increasing need for mid-market accommodations to cater to a younger generation that does not put much emphasis on star ratings; Emerging markets will overtake developed markets as a tourism and hospitality destination but also as key provider of customers.
SAUDI ARABIA. Increase in foreign direct investment seen as part of efforts to diversify the economy and boost investment inflows into the kingdom; National Transformation Programme updates to be revealed at Saudi Forum 2017.
dhgate