The demand for welfare and health services increases as the population grows older, and at the same time, the room for financing extra expenditure by higher taxation is limited because of an already high level of taxation and increasing tax competition. BIS Review 139/2007  5  How can we ensure that the public sector in general and welfare services in particular can adapt?
One way, the applicability of which varies from case to case, is to expose part of the public services to private competition. Another way is to focus on measuring performance of the public sector and put in place appropriate incentives to respond to change. The public sector needs also to be more responsive to its "customers" needs.