Public Spending and the Human Development Sector Mukesh Chawla ECSHD
Half a head of lettuce…. The customer only wanted half a head of lettuce, and insisted the stock boy check with the manager before denying the request. The boy approached his boss: “Some moron wants to buy half a head of lettuce, ” he said. Just then he saw that the customer was standing right behind him. “And this gentleman has agreed to buy the other half. ” – (Readers Digest, June ’ 02)
The story of this half……or why must all PERs worry about HD spending • Public expenditures on HD activities – health, education and social protection – constitute significant proportion of total public expenditures • The unique and socio-political nature of HD spending • Critical importance of incidence and outcome effects of HD spending
And the other half…or why must HD spending be overseen by PE Reviews • Rationale of public spending on HD typically remains unexplored if sound PER-type analysis is not carried out • Periodic quantitative and qualitative analysis of outcome effects and incidence important to effect corrections in conceptualization and implementation
Of morons and lettuce heads • More and more PERs focusing on public spending on HD • Focus on effectiveness, outputs and outcomes increasingly driving HD economists towards analysis of policies, budgets and service delivery • Sector studies inspired by findings of gaps in effectiveness and efficiency of public spending
Integration and Synergy: HD in PERs • Georgia (2002) – Emphasis on HD issues in a conventional PER • China (2002) – Good integration of HD issues in a PER focusing on provincial expenditures • Ukraine (2001) – HD sectors 35% of total local Government budget, but scope for more detailed analysis of HD issues • Ethiopia (2001), Nicaragua (2001): Focusing PE on poverty reduction (the other emerging trend, given PRSP and the need for medium-term expenditure framework)
Integration and Synergy: PERs initiating HD work • Turkey – PE analysis motivated detailed health sector review and a new health sector reform project • Slovakia – Social Sector Expenditure Review initiated health project
The reality check • Much of PER work still concentrates on big ticket items only, underplaying importance of HD sectoral issues • Much of lending (and even ESW) activities proceeds without an analysis of the appropriate role of public spending and provision in HD • Much of social-sector analysis not integrated with medium-term expenditure framework
Revisiting Anand…. or how many halves will make a full lettuce head • How can we manage such a (VERY) large PE agenda within a common framework? – Over time – Across networks and other partners – To ensure it supports government’s decision cycle (PRSP etc. ) – To derive an external assessment of budget systems – To inform our CAS
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