Marijn Verhoeven

The Efficiency of Government Expenditure: Experiences from Africa

This paper assesses the efficiency of government expenditure on education and health in 38 countries in Africa in 1984-95, both in relation to each other and compared with countries in Asia and the Western Hemisphere. The results show that, on average, countries in Africa are less efficient than countries in Asia and the Western Hemisphere; however, education and health spending in Africa became more efficient during that period. The assessment further suggests that improvements in educational attainment and health output in African countries require more than just higher budgetary allocations.

The effectiveness of government spending on education and health care in developing and transition economies

Abstract Recent studies show that corruption is associated with higher military spending [Eur. J. Polit. Econ. 17 (2001) 794] and lower government spending on education and health care [J. Publ. Econ. 69 (1998) 263]. This suggests that policies aimed at reducing corruption may lead to changes in the composition of government outlays toward more productive spending. However, little empirical evidence has been presented to support the claim that public spending improves education and health indicators in developing and transition countries. This paper uses cross-sectional data for 50 such countries to show that increased public expenditure on education and health care is associated with improvements in both access to and attainment in schools, and reduces mortality rates for infants and children. The education regressions are robust to different specifications, but the relationship between health care spending and mortality rates is weaker.

Does Higher Government Spending Buy Better Results in Education and Health Care

There is little empirical evidence to support the claim that public spending improves education and health indicators. This paper uses cross-sectional data for 50 developing and transition countries to show that expenditure allocations within the two social sectors improve both access to and attainment in schools and reduce mortality rates for infants and children. The size and efficiency of these allocations are important for promoting equity and furthering second-generation reforms.

Public expenditure in Latin America: trends and key policy issues

This paper examines trends in government spending in Latin America from the mid-1990s to 2006. It also examines key policy issues, including the cyclicality of spending, public investment, public employment, and social expenditures. It finds that primary expenditures have trended upward for the past ten years as a share of GDP, driven by increases in current spending, in particular for social expenditures. Fluctuations in real spending have continued to follow a procyclical pattern. The paper finds that there is substantial scope to improve the efficiency of public investment, public employment, and social spending.

Social issues in IMF-supported programs

As part of its mandate, the IMF seeks to create the conditions necessary for sustained high-quality growth, which encompasses a broad range of elements. These include sound macroeconomic policies, growth-enhancing structural reforms, good governance, and such social policies as cost-effective social safety nets and targeted social expenditures. This paper reviews the IMFs policy advice in two key areas of social policy: social safety nets and public spending on education and health care. It was initiated as part of the work by the World Bank and IMF to strengthen the poverty focus of adjustment programs in low-income countries, in particular within the framework of the Initiative for Heavily Indebted Poor Countries (HIPCs).

Equity and Efficiency in the Reform of Price Subsidies A Guide for Policymakers

This text provides guidance to policymakers on how to design and implement sould price-subsidy reforms. It draws on the experience of price-subsidy reform in 28 countries. The authors discuss economic and political considerations and make several recommendations concerning the speed of reform and social protection mechanisms. They discuss how the social impact of reform can be limited by establishing cost-effective and well-targeted temporary social protection mechanisms, and how governments can reduce the risk of political disruption by distributing the initial burden of reform fairly and by clearly explaining the costs and benefits to the public.

The Health Sector in the Slovak Republic : Efficiency and Reform

The paper assesses the financial situation of the health sector in the Slovak Republic. It also evaluates the efficiency of health expenditures and service delivery in comparison to the OECD and other new EU member states and suggests avenues for cost recovery and reform. The health sector of the Slovak Republic is plagued by financial problems. To turn around health system finances and achieve larger gains in health outcomes, the efficiency of health spending needs to increase and the mix and quality of real health resources need to be improved. Although Slovaks overall health spending efficiency is on par with that of the OECD, substantial inefficiencies occur in the process of transforming intermediate health inputs into health outcomes. Efficiency may be enhanced by containing the cost of drugs and reducing reliance on hospital care. Also, although cost-effectiveness may be relatively high at present, its sustainability in the future is an issue.

Aid Scaling Up: Do Wage Bill Ceilings Stand in the Way?

This paper assesses whether the scaling up of aid and the resulting increase in government spending that is needed to meet the Millennium Development Goals (MDGs) would be hampered by wage bill ceilings that are often part of government programs supported by the IMF`s Poverty Reduction and Growth Facility (PRGF). Based on country case studies for 2003-05, the paper suggests that, in the past, wage bill ceilings have not restricted the use of available donor funds. Yet the paper offers a number of suggestions for further enhancing the flexibility of wage bill conditionality in PRGF-supported programs to respond to higher aid flows that may result in the future.

Fiscal Reforms in Low-Income Countries

The reform of fiscal policies and institutions lies at the heart of structural adjustment in developing countries. Although the immediate aim of such reform is to reduce fiscal imbalances to achieve macroeconomic stability, the long-term goal is to secure more durable improvements in fiscal performance. This study reviews the fiscal reform experience of 36 low-income developing countries that undertook macroeconomic and structural adjustment in the context of the IMFs Structural Adjustment Facility and Enhanced Structural Adjustment Facility during the period of 1985-95.

Public Spendingon Health Care and Poor

This paper estimates the impact of public spending on the poors health status in over 70 countries. It provides evidence that the poor have significantly worse health status than the rich and that they are more favorably affected by public spending on health care. An important new result is that the relationship between public spending and the health status of the poor is stronger in low-income countries than in higher-income countries. However, the results suggest that increased public spending alone will not be sufficient to meet international commitments for improvements in health status.