Public Sector Shock

Public Sector Shock

The Impact of Policy Retrenchment in Europe

Edited by Daniel Vaughan-Whitehead

The goal of this volume is to study this ‘public sector shock’. While budgetary reforms seek to ensure a more balanced and sound economic policy, they may generate new work inequalities among public sector employees, most particularly among women, who account for a considerable proportion of public sector employment. Cuts in education and training may also have an impact on the quality of human capital in both the public and private sectors, despite the fact that the recent crisis has shown the value of education as employees with better skills and training are more likely to maintain their jobs and incomes.

Chapter 11: Portugal: Structural reforms interrupted by austerity

Helena Rato

Subjects: economics and finance, labour economics, public sector economics, social policy and sociology, economics of social policy, labour policy

Extract

Employment in Portugal’s public administration registered huge growth in the second half of the 1970s, mainly due to decolonization, as the public administration was used to integrating people coming from the former Portuguese colonies, and democratization, which involved the improvement of the welfare state as well as local government. From 1984 onwards civil service employment continued to increase, largely driven by the obligations arising from EEC membership and subsequent implementation of EU policies. In the 1990s, restructuring the public administration became part of the government’s policy agenda, aimed at increasing efficiency and improving the quality of public services in line with New Public Management theories. The improvement of human capital was thus one of the main drivers of public administration reform early in the new millennium. But when Portugal was put under an EU excessive deficit procedure in 2005, the focus of its policy agenda had to be changed in order to reduce the structural deficit. Initially, the Portuguese government tried to conciliate restrictive budgetary measures with economic development within public administration structural reform programmes. In the context of the financial and sovereign debt crises, however, this attempt was not successful and thus there was a drift towards increasingly restrictive adjustment programmes.

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