World Bank2012-06-142012-06-142007-11https://hdl.handle.net/10986/8066The countries of Southeastern Europe (SEE) and the province of Kosovo (thereafter, Kosovo) have undergone a significant, though difficult, transition over the past decade. Series of conflicts in the region have complicated the transition process, which in the initial phase focused on macroeconomic stabilization and reconstruction. Helped by macroeconomic stability and efforts in advancing structural reforms, real Gross Domestic Product, or GDP growth in region has picked up this century, averaging 5.8 percent during 2000-2006, although it has still lagged the pace in both the more advanced reformers and the average for emerging Asia. In addition to boosting living standards, the SEE countries' shared aspiration to advance European Union (EU) integration has been increasingly shaping the reform agenda. This report reviews the level, composition and outcomes of government spending and distills some of the lessons that emerge from efforts by the SEE countries in reforming expenditure policies. The report identifies key remaining challenges and proposes a broad menu of options in further reforms of sectors that account for the largest shares of public spending across the countries, and where reforms are likely to have significant budgetary implications. This has motivated the choice of sectors discussed in the report: social protection (including pensions), health, education, public administration and infrastructure.CC BY 3.0 IGOACCOUNTABILITYACCOUNTINGADMINISTRATIVE REFORMSALLOCATIONARREARSBAILOUTSBANK CREDITBENEFICIARIESBINDING CONSTRAINTBUDGETARY FUNDBUDGETARY IMPLICATIONSBUDGETINGCAPITAL EXPENDITURECAPITAL EXPENDITURESCAPITAL PROJECTSCAPITAL SPENDINGCAPITAL STOCKCENTRAL BUDGETCENTRAL GOVERNMENTCIVIL SERVICECIVIL SERVICE PAYCOLLECTED REVENUESCOLLECTION PROCESSESCOMPETITIVE BIDSCOMPOSITION OF PUBLIC SPENDINGCONTINGENT LIABILITIESCOST RECOVERYCOST-EFFECTIVENESSCOUNTRY ECONOMISTSCREDIT EXPANSIONCURRENT ACCOUNT DEFICITSDATA AVAILABILITYDEBT SUSTAINABILITYDECENTRALIZATIONDEFENSE EXPENDITURESDEMAND FOR SERVICESDOMESTIC CREDITDOMESTIC DEBTECONOMIC CLASSIFICATIONECONOMIC GROWTHECONOMIC RECOVERYEDUCATION EXPENDITURESEDUCATION POLICIESEDUCATION POLICYEDUCATION SPENDINGEDUCATIONAL ATTAINMENTEFFICIENCY IMPROVEMENTSEFFICIENCY OF RESOURCE USEEMERGING MARKETSEQUIPMENTEQUITY ISSUESEXPENDITURE ADJUSTMENTSEXPENDITURE CATEGORIESEXPENDITURE CUTSEXPENDITURE GROWTHEXPENDITURE LEVELSEXPENDITURE POLICIESEXTERNAL DEBTEXTERNAL IMBALANCESFINANCIAL ASSISTANCEFINANCING ARRANGEMENTSFISCAL ADJUSTMENTFISCAL ADJUSTMENTSFISCAL BALANCEFISCAL BURDENFISCAL CONSOLIDATIONFISCAL COSTFISCAL COSTSFISCAL DEFICITFISCAL DEFICITSFISCAL ENVELOPEFISCAL POLICIESFISCAL POLICYFISCAL PRESSURESFISCAL REFORMSFISCAL SUSTAINABILITYFISCAL SYSTEMFIXED INVESTMENTFOREIGN BANKSFOREIGN BORROWINGFOREIGN CURRENCYFOREIGN DIRECT INVESTMENTFOREIGN GRANTSFUND MANAGERSGOVERNMENT DEBTGOVERNMENT DEFICITSGOVERNMENT EMPLOYMENTGOVERNMENT EXPENDITUREGOVERNMENT EXPENDITURESGOVERNMENT FINANCEGOVERNMENT FINANCE STATISTICSGOVERNMENT GUARANTEESGOVERNMENT REVENUESGOVERNMENT SPENDINGGROSS DOMESTIC PRODUCTGROWTH RATEHEALTH CAREHEALTH EXPENDITUREHEALTH EXPENDITURESHEALTH FINANCINGHEALTH INSURANCEHEALTH INSURANCE FUNDHEALTH OUTCOMESHEALTH SECTORHEALTH SERVICESHEALTH SPENDINGHUMAN CAPITALINCOME LEVELSINCOME TAXINFLATIONINFRASTRUCTURE INVESTMENTINTEREST PAYMENTSINTERNATIONAL BANKINTERNATIONAL DEVELOPMENTLABOR MARKETLABOR MARKETSLIVING STANDARDSLOANLOCAL GOVERNMENTMACROECONOMIC STABILITYMACROECONOMIC STABILIZATIONMARKET ECONOMIESNATIONAL ACCOUNTSNATIONAL AUTHORITIESNATIONAL BANKOLD-AGEORGANIZATIONAL STRUCTURESPAYROLL TAXESPENSION REFORMPENSION SYSTEMPENSION SYSTEMSPERSONAL INCOMEPERSONAL INCOME TAXPERSONAL INCOME TAX RATEPERSONAL INCOME TAXESPERVERSE EFFECTSPERVERSE INCENTIVESPOLICY COMMITMENTSPOVERTY REDUCTIONPRIVATE FINANCINGPRIVATE FOREIGN INVESTORSPRIVATE SECTORPRIVATE SPENDINGPROGRAMSPUBLIC ADMINISTRATIONPUBLIC EMPLOYEESPUBLIC EMPLOYMENTPUBLIC EXPENDITUREPUBLIC EXPENDITURE POLICYPUBLIC EXPENDITURESPUBLIC FINANCESPUBLIC HEALTHPUBLIC INFRASTRUCTUREPUBLIC INVESTMENTPUBLIC PENSIONPUBLIC PENSIONSPUBLIC PRIVATE PARTNERSHIPSPUBLIC PROVISIONPUBLIC REVENUESPUBLIC SECTORPUBLIC SECTOR EMPLOYMENTPUBLIC SECTOR MANAGEMENTPUBLIC SERVICEPUBLIC SERVICESPUBLIC SPENDINGQUALITY OF EDUCATIONREFORM AGENDAREFORM EFFORTSREFORM PROCESSREFORM STRATEGIESREMITTANCESRETURNROAD NETWORKSALES TAXESSERVICE DELIVERYSERVICE PROVISIONSIZE OF GOVERNMENTSOCIAL ASSISTANCESOCIAL BENEFITSSOCIAL CONTRIBUTIONSSOCIAL INSURANCESOCIAL PROTECTIONSOCIAL PROTECTION EXPENDITURESSOCIAL SECURITYSOCIAL SECURITY CONTRIBUTIONSSOCIAL SERVICESSOCIAL WELFARESPENDING LEVELSSTRUCTURAL REFORMSSUB-NATIONAL GOVERNMENTSSUSTAINABILITY ANALYSISTAX BURDENTAX CUTSTAX INCOMESTAX RATESTAX REVENUESTAXPAYERSTOTAL EXPENDITURESTRANSPARENCYTREASURYTREASURY SYSTEMSWAGE EXPENDITURESWELFARE PROGRAMSWorld Bank10.1596/8066