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Serbia - Right-Sizing the Government Wage BillSerbia's public sector wage bill
 constitutes a significant share of total government
 expenditure. At present, it is significantly higher than in
 most neighboring European Union (EU) member countries. This
 is largely due to higher average levels of compensation,
 rather than higher levels of staffing. While wage spending
 has fallen recently this is not the occasion to be sanguine
 about the Government's wage and employment policies.
 There are two reasons. First, continuing control over the
 wage bill is a key part of the Government's overall
 deficit reduction strategy. Given the Government's
 reluctance to raise taxes and the difficulty it confronts in
 reducing other major categories of expenditures
 (particularly pensions), restraining the wage bill is
 critical to fiscal sustainability. In connection with its
 standby arrangement with the International Monetary Fund
 (IMF), the government is committed to enacting fiscal
 responsibility legislation which would cap wage bill
 spending at eight percent of gross domestic product (GDP)
 over the medium term. To date, the Government has been
 relying on blunt instruments to achieve this target; most
 importantly a freeze on nominal wages and a partial freeze
 on the creation of new positions, both introduced in 2009.
 As the current recession eases, pressures to increase wages
 are mounting. The wage freeze is becoming politically
 unsustainable. More nuanced methods of restraining the wage
 bill are required. Second, over the longer term, the present
 policy of continuous wage and position freezes would
 undermine the quality of public administration. Persistent
 wage freezes would make it difficult to attract and retain
 competent staff. Persistent position freezes would lock in
 existing patterns of over- and under staffing. On the other
 hand, a reversion to the former system of ad hoc adjustments
 in staffing and wages could set the stage for unsustainable
 wage bill growth in the future. Structural reforms are
 therefore required.
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Tanzania - Public Expenditure Review (Vol. 2 of 2) : Consolidating the Medium Term Expenditure FrameworkThis Public Expenditure Review (PER) for FY00, provided support to the Government of Tanzania in the preparation of its budget, and Medium Term Expenditure Framework (MTEF), and performed as well an external evaluation of the country's budget performance. The report contains two volumes, the Main Report (v. I) first describes the main features of the PER process, to then present the main findings emerging from a review of fiscal performance, and public expenditure management in Tanzania. A discussion of systemic fiscal issues, critical to enhancing the effectiveness of public expenditure follows, to reach a series of updated sectoral expenditure reviews, prioritizing on education, health, water, agriculture, works, land and justice. Volume II, presents the Government's MTEF for FY-01/03, in which the macroeconomic context is described, providing a cross sectoral MTEF within the priority sectors. In addition, a detailed discussion of the public sector reform program is presented, including discussions on the HIV/AIDS epidemic, identified as a key challenge to development efforts, requiring a multi-sectoral approach to contain its spread. Despite progress in consolidating the budget process, and macroeconomic policy, the transitional status of the country's economy, makes macroeconomic management particularly difficult. The report suggests rethinking the MTEF's contingency plans, within a flexible framework to further improve the linkages between prioritization, and the budgetary process.
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Public Employment and Governance in Middle East and North AfricaGovernment wage bills have been growing
 across the world, but are exceptionally high in the MENA
 region relative to countries’ state of development, whether
 measured as a share of GDP, or of government revenue and
 spending (World Bank, 2004). Across the region government
 wage bills threaten fiscal sustainability. There are many
 drivers behind the large wage bills, whether of central
 government alone or of general government. Government
 employment numbers also seem to grow inexorably, in many
 areas faster than required to deliver services in line with
 population growth. Other factors have been weak staff
 control systems, the authorization of new recruitment
 outside budget frameworks, and laxly applied staff
 performance assessment systems, in addition to absenteeism,
 and the difficulty under public service rules of
 disciplining and ultimately terminating poorly performing
 staff. This paper takes a look at government wage bill
 growth, alongside current approaches to recruitment, staff
 performance assessments and promotions, with particular
 emphasis on Egypt, Morocco and Tunisia. These country
 examples are complemented by a broader regional analysis to
 illustrate overarching trends in public sector
 employment.The objective is to identify the various forces
 at work, how they interact, and thereby document and
 understand better the dynamic of public sector wage bill
 expansion in the Middle East as well as potential linkages
 to public sector performance. The paper also looks at
 reform efforts, extracts lessons and identify potential
 reform options to better control wage bill growth and the
 unbalancing effects it has had on the efficiency and
 effectiveness of government spending generally. Furthermore,
 while the paper does not present a comprehensive overview of
 the nature of public employment in MENA, it aims to identify
 potential areas for further research in this domain.