In the Eye of the Storm? Societal Aging and the Future of Public-Service Reform

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Abstract

One of the principal motivations for the reinvention of many central governments over the last two decades is the need to deal with chronic budget deficits. As budget surpluses reappeared at the end of the 1990s, the pressure to restructure seemed to ease in some countries. However, observers suggested the relief was only temporary, and aging populations would soon put more stress on government budgets, creating a need for further retrenchment. This article assesses the vulnerability of three central governments—the United Kingdom, Canada, and the United States—to aging-related fiscal stress. Because of institutional differences, the U.S. government is likely to be hit hardest by this demographic change. This may imply that public-sector reform will take a different path in the United States than it will in the United Kingdom or Canada.

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