Pro-Poor Spending in the Human Development Sector

1. Pro-Poor Spending in the Human Development Sector Mukesh Chawla ECSHD

2. Where is the government? Poor people in Ghana named institutions that are important in their daily lives. These are: • Assemblymen • Chiefs • Churches Where is the government? Source: Voices of the Poor 2002

3. In theory……. Public spending should promote efficiency (by correcting for various market failures) and equity (by improving the distribution of economic resources) • Dominique van de Walle, 1995

4. ……….but the evidence is “Why ask the village self-governance authority, regional administration or state administration for help when they live at our expense, collecting taxes? When we apply to them they tell us there is no money, yet at the same time they build themselves houses, buy imported cars, and the like…….I do not trust them” - A refugee from Tash-Bulak, Kyrgyz Republic Source: Voices of the Poor 2002

5. In theory…… • Intervention justified on grounds of improving distribution • There are few other instruments that can do the same • Informational constraints in the market • Etc.

6. ……………and evidence “We hear the government introduced free primary education and provides for all essential requirements, notebooks, pens and pencils……… The pupils have never received these items.” • A group of women in Kuphera, Malawi Source: Voices of the Poor 2002

7. Targeting the poor “The term “targeting” in eradicating poverty is based on an analogy – a target is something fired at. It is not altogether clear whether it is an appropriate analogy.” • Amartya Sen

8. Critical questions for all HD work • How much of public spending really goes to the poor? • How much do we actually worry about service delivery issues? • How central is incidence analysis to our work? • To what extent is our lending program based on our understanding of the above?

9. Mixed bag….. • Some analytical work does have a marked pro-poor focus, much does not • Some regions seem to worry more about such issues than others • Some projects are based on evidence of the state machinery’s capability, many are not

10. How does one explain this? • Tendency to concentrate on public expenditure management, fiscal discipline, financial analysis, procurement issues, etc. • Tendency to concentrate on resource mobilization instead of resource allocation • Tendency to think in silos

11. Some real difficulties……… • We don’t really know much about allocating resources across sectors • Within sectors also, not obvious what the right tools are and what they actually measure • Data problems

12. ……..and some not so real • Much analytical work PREM-driven and often guided by other priorities • HD sector staff overwhelmed with project-related work • Widespread belief that performance is judged by the “number of projects taken to the Board” • Oversight (QAG, managerial, etc.) variable

13. Still lots of good examples • Indonesia (2001) on public spending for education and health • Vietnam (2000) analyzing pro-poor bias of public spending • Georgia (2002) drawing on incidence analysis from poverty study • Slovakia (2002) based on study of Roma population and poverty analysis • Karnataka (India, 1997) using utilization disaggregated by quintile groups

14. Before we get complacent….. “Poverty results in suicide, hunger, death, lack of money, lack of hope. Things are getting worse every day. People are afraid of starvation, lack of heating, ethnic unrest. People bite one another like dogs” • Voice of the Poor from Kyrgyz Republic

15. Moving forward • Analytical tools to evaluate impact of public spending on the poor • Define “effectiveness” as an intersection of incidence (or spending per person) and utilization (or consumption per person) • Mandatory review of capacity and capability of pro-poor public spending • Establish measurability criteria and link with lending