Victoria Gunnarsson

Government Spending on Health Care and Education in Croatia: Efficiency and Reform Options

This paper assesses the relative efficiency of government spending on health care and education in Croatia by using the so-called Data Envelopment Analysis. The analysis finds evidence of significant inefficiencies in Croatias spending on health care and education, related to inadequate cost recovery, weaknesses in the financing mechanisms and institutional arrangements, weak competition in the provision of these services, and weaknesses in targeting public subsidies on health care and education. These inefficiencies suggest that government spending on health and education could be reduced without undue sacrifices in the quality of these services. The paper identifies ways to do that.

Budget Rigidity and Expenditure Efficiency in Slovenia

This paper assesses the relative efficiency and flexibility of public spending in Slovenia compared to the advanced and new EU member states. Spending on health care, education, and social protection is relatively high in Slovenia without achieving correspondingly better outcomes. Inefficiencies appear to stem from the financing mechanisms for social services, institutional arrangements, and the weak targeting of social benefits. In addition, the composition of spending appears to be strongly tilted towards nondiscretionary items that reduce the fiscal room for maneuver. Greater flexibility is needed to facilitate the reallocation of relatively inefficient expenditure into higher priorities. In this manner, medium-term expenditure rationalization can focus on reducing inefficient outlays rather than restraining traditionally flexible components of the budget, such as public investment.

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.

Wage Spending Flexibility in Low-Income Countries

A fundamental characteristic of performance budgeting is the shift from input control toward accountability for results. There are many types of performance budgeting with much variation in their complexity and ambition (see Chapter 1). All, however, carry with them a presumption that those in charge of policy implementation at the disaggregated micro level—primarily, managers of government departments and agencies—are held to account for what they are achieving rather than for remaining within prescribed input limits. The basic idea is that such managers understand better than decision-makers at the central level how to organize their inputs to achieve specific objectives. In contrast, centralized control of budgets at the line-item level is believed to stifle innovation at the micro level, move incentives toward spending rather than economy, and dilute the focus on policy objectives (Roberts, 2003).