world development report 2004 Making Services Work for Poor People

Messages Services are failing poor people. But they can work. How? By empowering poor people to –Monitor and discipline service providers –Raise their voice in policymaking By strengthening incentives for service providers to serve the poor

Outcomes are worse for poor people Deaths per 1000 births Source: Analysis of Demographic and Health Survey data

Growth is not enough Percent living on $1/day Primary completion rate (percent)Under-5 mortality rate Target2015 growth alone Target2015 growth alone Target2015 growth alone East Asia Europe and Central Asia Latin America Middle East and North Africa South Asia Africa Sources: World Bank 2003a, Devarajan Notes: Average annual growth rates of GDP per capita assumed are: EAP 5.4; ECA 3.6; LAC 1.8; MENA 1.4; SA 3.8; AFR 1.2. Elasticity assumed between growth and poverty is –1.5; primary completion is 0.62; under-5 mortality is –0.48.

But increasing public spending is also not enough * Percent deviation from rate predicted by GDP per capita Source: Spending and GDP from World Development Indicators database. Under-5 mortality from Unicef 2002 Making Services Work for Poor People

Vastly different changes in spending can be associated with similar changes in outcomes. Sources: Spending data for 1990s from World Development Indicators database. Child mortality data from Unicef Other data from World Bank staff

How are services failing poor people? Public spending usually benefits the rich, not the poor

Expenditure incidence HealthEducation Source: Filmer 2003b

Public spending benefits the rich more than the poor Money/goods/people are not at the frontline of service provision –Public expenditure tracking results on what reaches or is at the facility level How are services failing poor people?

Nonwage funds not reaching schools: Evidence from PETS (%) CountryMean Ghana Madagascar Peru 2001 (utilities) 30 Tanzania Uganda Zambia 2001 (discretion/rule) 76/10 Source: Ye and Canagarajah (2002) for Ghana; Francken (2003) for Madagascar; Instituto Apoyo and World Bank (2002) for Peru; Price Waterhouse Coopers (1998) for Tanzania; Reinikka and Svensson 2002 for Uganda; Das et al. (2002) for Zambia.

Access to primary school and health clinics in rural areas Distance to nearest primary school (km) Distance to nearest medical facility (km) GNI per capita Poorest fifth Richest fifth RatioPoorest fifth Richest fifth Ratio Chad Nigeria CAR Haiti India Bolivia Morocco Source: Analysis of Demographic and Health Survey data. Note: GNI per capita is in 2001 US$. Medical facility encompasses health centers, dispensaries, hospitals, and pharmacies.

Public spending benefits the rich more than the poor Money/goods fail to reach frontline service providers Service quality is low for poor people How are services failing poor people?

Percent of staff absent in primary schools and health facilities

But services can work Motivating health workers reduced infant mortality in Ceará, Brazil Contracted services in Johannesburg, South Africa improved transport and water delivery Cash transfers to families in Mexico increased enrollment, lowered illness Citizen report cards improved services in Bangalore, India Publicizing what schools were supposed to get resulted in more money reaching primary schools in Uganda Delegating project choice and management to villagers improved infrastructure in Indonesia

A framework of relationships of accountability Poor peopleProviders

Short and long routes of accountability

The relationship of accountability has five features

A framework of relationships of accountability Poor peopleProviders Policymakers

Client-provider Strengthen accountability by: Choice Participation: clients as monitors

FSSAP Bangladesh Criteria: –Attendance in school –Passing grade –Unmarried Girls to receive scholarship deposited to account set up in her name School to receive support based on # of girls Making Services Work for Poor People

Client-provider: EDUCO Program in El Salvador Parents’ associations (ACEs) –Hire and fire teachers –Visit schools on regular basis –Contract with Ministry of Education to deliver primary education

EDUCO promoted parental involvement… Source: Adapted from Jimenez and Sawada 1999 …which boosts student performance

The Bamako Initiative Community managed services Partnership between state and community organizations Financial contributions from users locally retained, owned and managed Government contract and subsidy

Making Services Work for Poor People Client-Provider: Bamako Initiative Evolution of antenatal care coverage Mali Evolution of national immunization coverage

Making Services Work for Poor People Under five mortality decrease ….among the poor in Mali Client-Provider: Bamako Initiative

No blanket policy on user fees

Poor people Policymakers A framework of relationships of accountability Providers

Citizen-policymaker Political economy of public services

Ah, there he is again! How time flies! It’s time for the general election already! Why don’t services work for poor people? By R. K. Laxman

PRONASOL expenditures according to party in municipal government Source: Estevez, Magaloni and Diaz-Cayeros 2002

Citizen-policymaker Political economy of public services Formal channels Importance of non-formal channels Role of information –Citizen report card (initiatives in Vietnam, Indonesia, Philippines) –Publicizing textbook distribution in Philippines—and engaging communities as monitors

Schools in Uganda received more of what they were due Source: Reinikka and Svensson (2001), Reinikka and Svensson (2003a)

A framework of relationships of accountability Providers Policymakers Poor people

Policymaker-provider “Hard to monitor” versus “Easy to monitor” Information for monitoring

Policymaker-provider: Contracting NGOs in Cambodia Contracting out (CO): NGO can hire and fire, transfer staff, set wages, procure drugs, etc. Contracting in (CI): NGO manages district, cannot hire and fire (but can transfer staff), $0.25 per capita budget supplement Control/Comparison (CC): Services run by government 12 districts randomly assigned to CC, CI or CO

Utilization of facilities by poor People sick in last month Source: Bhushan, Keller and Schwartz 2002

Ceara : increased effectiveness of government services Making Services Work for Poor People Source:

Poor peopleProviders Policymakers A framework of relationships of accountability

What not to do Leave it to the private sector Simply increase public spending Apply technocratic solutions

Of course we have progressed a great deal, first they were coming by bullock-cart, then by jeep and now this! What not to do… technocratic solutions…

What is to be done? Expand information –Generation and dissemination –Impact evaluation Tailor service delivery arrangements to service characteristics and country circumstances

Eight sizes fit all?

What are we up against when attempting to improve aid efficiency?

WDR messages to donors Harmonize policies and procedures around recipient’s systems Where possible, integrate aid in recipient’s budget Finance impact evaluation of service delivery innovations – $300 million a year in Bank projects allocated for evaluation

Making Services Work for Poor People world development report 2004

Strengths of Clients and Policymakers as monitors

Bottlenecks: Skilled human resources Physical access Quality Cost Individual Oriented clinical care High asymmetry of information Transaction intensive High discretion Levers: Direct control of users Self Regulation Sophisticated purchasing capacity Providers: Hospitals Clinics Individual practitioners (licensed or not…)

Bottlenecks: Low demand Low continuity Opportunity Cost Population Oriented Outreach Lower Asymmetry of information Less Transaction intensive Low discretion: standards Public good nature or network externality Levers: Collective action: Government Primarily Providers Integrated in clinical services (clinics, GP) Integrated in schools, workplace Outreach health post Mobile Activities Home visits, door to door activities

Bottlenecks: Knowledge Availability and cost of commodities Family Oriented Support to self care Low asymmetry of information Transaction light High discretion in taste/ values Levers: Imitate the market Direct control of users Providers Retail Community based organizations/ associations Cooperatives Social marketing, media, Women’s groups, associations etc

Poor peopleProviders Policymakers A framework of relationships of accountability

Poor peopleProviders National policymakers Decentralization Local policymakers