World Economic and Social Survey 1997

Trends and Policies in the World Economy

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Authoritative and reliable, the Survey is a detailed assessment of the state of the world’s economic and social situation. Its forecasts for the upcoming year and lucid description of national and international economic policies, emerging issues and trends make it ideal for those engaged in international trade. As a special focus in this year’s edition, the Survey addresses four long-term issues of importance to the international community: the economics of the resurgent global tuberculosis crisis, how the international arms trade has changed since the end of the Cold War, recent trends in international travel as a dimension of world economic integration and prospects for global emissions of CO2 under different outlooks for policy and technical change.



The economic and social role of the state and the budget

While there appears to be a consensus that the ambitions of government in the economic and social arena were excessive earlier, one must not lose sight of the fact that Governments provide important services and carry out politically mandated economic and social functions, and that only government will undertake many of these activities. Moreover, while government borrowing has been excessive in many cases, it does not follow that Governments should never borrow. Indeed, there is no reason that government outlays that benefit a generation of citizens — as for a bridge or sewer system — should be fully paid for by current taxpayers rather than by the beneficiaries over time through the servicing of bonds. It is important, in other words, to know where the boundary lies between an appropriate deficit and an excessive one. Partly, tms entails a measurelnent problem: a variety of approaches and recommendations exist on what should be included in the government accounts, how the deficit should be defined and how small it should be. The present chapter thus seeks to sort through recent thinking about the proper scope of the economic and social activities of government and about budgetary goals for government.


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