Efficiency what?

Efficiency savings: in recent years there has been a concerted drive to reduce the costs in commodities like electricity, to professionalise property management and to make more use of shared services. Here there is a question about control – how far should control be centralised or devolved
to best make efficiency savings. Striking the right balance is difficult, but
possible, as the Institute’s recent work on IT makes clear. The second question is about how such savings translate into cash coming out of the system – to be credible it must be clear which budgets have been reduced in anticipation of these savings, and therefore which ones have to make up any shortfall should the projected efficiencies not be realised.

Source: Undertaking a fiscal consolidation: A guide to action. Institute for Government

Related:
Mark Robsinson reviews the report;

Politics are also the reason why the real tough work required for a successful fiscal consolidation usually takes within the first two budgets after a change of government. If this doesn’t happen, the sense of urgency amongst voters dissipates. Political support for consolidation falls away rapidly, with the electorate falling prey to what the London-based Institute for Government calls – in its interesting recent report Undertaking a Fiscal Consolidation – “consolidation fatigue”.

Social Policy After the Economic Crisis

Social Policy After the Economic Crisis;

Maya MacGuineas, Director of the Fiscal Policy Program at New America and President of the Committee for a Responsible Federal Budget, argued that the economic crisis is revealing the deep cracks in our existing social insurance system. Although the focus right now is on stimulus and economic growth, we must start talking about our institutions and how to update them. The federal budget deficit will reach at least $1 trillion next year, MacGuineas said, and policymakers need to review the budget line-by-line and think hard about how we are going to pay for it all. Because most of our money currently goes towards “mandatory spending programs,” these programs cannot be ignored when we rethink the budget. MacGuineas would like to link stimulus and long-term entitlement reform. The sums of current stimulus proposals are so large as to enable major, lasting investments in our economy. We should borrow money now, MacGuineas argued, but offset costs once the economy is stabilized. Without neglecting the importance of greater individual responsibility, we must think about vulnerable populations in our country right now--children and those hurt by globalization. Government must become more progressive, and focus its limited resources on those that need them most. The current economic climate demands major reforms, MacGuineas concluded, and the national discussion about the most appropriate policy choices is just beginning.

More on the Transition

Where Should the President-elect Begin?

West also moderated a discussion with former White House speech writer Terry Edmonds and Brookings senior fellow emeritus Stephen Hess, a longtime student of presidential transitions and author of the new transition workbook, What Do We Do Now? (Brookings Institution Press, 2008). Two former White House chiefs of staff, Ken Duberstein and Leon Panetta, offered their thoughts on the election results and the policy environment facing the president-elect. Brookings President Strobe Talbott provided introductory remarks.

Memo to the President: Lead With Confidence

Grading the Election Theories

The Real Mandate Is to Bridge the Wealth Gap

What Obama Could Learn From Reagan

Assorted on transition

World Economic Outlook

According to Michael Mussa;

Economic growth has recently slowed across much of the world economy following stronger-than-expected performance during the first quarter of 2008. The net result is likely to be that on a year-over year basis, global real GDP growth for 2008 will be only slightly below the 3.8 percent forecast last April. For 2009, however, growth now looks likely to decelerate to slightly below 3.5 percent rather than accelerate to 4 percent.

Meanwhile, the broad upsurge in commodity prices of earlier this year has been largely if not completely reversed. In particular, the price for light sweet crude has fallen back from a peak of almost $150 per barrel to about $100 per barrel but is still above the $80 per barrel price of late 2007. Recent sharp declines in commodity prices will help to bring down headline inflation rates, at least for a while, although core inflation rates will likely remain uncomfortably high in a number of countries. In some emerging-market countries, where policies have remained lax, inflation will continue to be a critical problem.

Thus, looking to the rest of 2008 and to 2009, the world economy will experience mild stagflation. World real GDP growth (on the basis of the International Monetary Fund’s World Economic Outlook [WEO]) will be significantly below the 4¾ percent average annual rate achieved from 2004 through 2007 but meaningfully above the 2½ percent rate that marks the borderline of global recession.1 World consumer price inflation (measured on a 12-month basis) will fall below the recent high of over 6 percent but remain above 4 percent through 2009. Economic policies, therefore, will generally face the dual challenges of ensuring that inflation returns to acceptable rates within reasonable time horizons and of guarding against unnecessarily deep and prolonged slowdowns in output growth.

Audio of the event

Technology meets Government Accountability

The Government Accountability Project of the Mercatus Center at George Mason University