Poland - Public Expenditure Review : Analysis of Social Sectors and Public Wages

Abstract

This report looks at public spending on
 pensions, education, health, social assistance, labor market
 programs, and public wages. Presenting the findings of a
 series of studies and notes compiled sice April 2009, it
 highlights how reforming such spending, which comprises
 about one quarter of gross domestic product (GDP), is
 essential for mitigating the impact of the economic crisis
 and for transforming Poland from a welfare state to a
 workfare society in line with Government's Vision 2030.
 The report has two main messages. First, Poland can take
 measures to reduce public expenditures on social sectors and
 public wages by around 2.3 percentage points over the next
 three years. Second, beyond supporting the fiscal adjustment
 required in the context of the economic crisis, public
 expenditure reforms can also help bring about structural
 changes envisioned as part of the Government's strategy
 for 2030. This report provides a comprehensive assessment of
 Poland's social sector and public wage polices and lays
 out options for reform. The summary report has five parts.
 The first part lays out the macroeconomic context. It
 emphasizes that Poland has weathered the global economic
 crisis remarkably well but that the recovery is likely to be
 feeble and subject to uncertainty. The next part discusses
 the fiscal fallout of the crisis and argues that public
 expenditure reform should be a crucial pillar for fiscal
 consolidation. Sections three to five contain the main
 findings of the report. Section three presents a list of
 important reforms of public expenditures on social sectors
 and wages in support of Vision 2030. Section four simulates
 the fiscal impact of public expenditure reforms, with a
 particular focus on state budget expenditures. The final
 section discusses how institutional reforms in the areas of
 medium-term and performance-based budget can support the
 reform agenda. Volume two presents the detailed analyses of
 social sectors and institutional reforms of public finance.