Public Sector Employment in Developing Countries An Overview ofPast and Present Trends

The debate on the public sector has been central in structural adjustment programmes applied in developing countries during recent years. The common grounds of the discussion have been the size of the public sector, its role and its efficiency in delivering services. The common criticisms of the 1980s are that the public sector is too big, overstaffed and inefficient. Examines these issues under a longterm perspective. Finds that at the aggregated level there is no clearcut evidence to support those criticisms of the size of the public sector in developing countries. Compared with industrialized countries, there is no particular evidence of the public sector being too big in the developing world. However, it appears that the sequence of the adjustment process has negatively affected the performance of important parts of the public sector by distorting the proportion of wage and nonwage expenditures, disregarding their complementarity. The consequent imbalance between inputs and employment has resulted in practical overstaffing.