Pay Determination in the Public Service: An International Comparison

Abstract

In recent years almost all industrialised countries have adopted specific measures in order to increase efficiency and to reduce costs in the public sector and, as labour cost is the most important component of total cost, specific policies have been adopted to increase labour productivity and to keep the growth of public employees’ pay under rigid control. One of these policies which is of particular interest is the decentralisation of the pay determination system. Some countries have decentralised the system of pay and other working conditions for public sector employees both at local and at single-administrative unit level, while other countries have maintained their traditional centralised system. An interesting question is, therefore, whether the countries that have reformed their pay determination systems in order to achieve greater decentralisation have actually succeeded in diminishing unit labour costs — and, more generally increasing the efficiency of their public administration. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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