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Making Services Work for Poor People

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1 Making Services Work for Poor People
world development report 2004 Making Services Work for Poor People

2 Messages Services are failing poor people.
But governments, citizens, and donors can make them 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 Too often, services are failing poor people—in access, quantity, quality.

3 MDGs—Global aggregates
Eradicate poverty and hunger Universal primary education 1. We begin with the MDGs, and consider global aggregates only. For income poverty we are on track. Of course, this is because rapid growth in India and China, the two most populous countries, is reducing poverty at a rapid rate. This global aggregate doesn’t show that in Africa, we’re off track on the poverty goal too. [All these numbers come from the MDG website 2. But for the HD goals, we are seriously off track, even at the global level. Source:

4 MDGs—Global aggregates
Promote gender equality Reduce child mortality Furthermore, we are off track because these aggregates are even worse for poor people. Source:

5 Outcomes are worse for poor people Percent aged 15 to 19 completing each grade or higher
Why are these outcomes worse for poor people? Why are we falling short of the health and education goals? Is it simply because there has not been enough economic growth? Source: Analysis of Demographic and Health Survey data

6 Growth is not enough Percent living on $1/day
Primary completion rate (percent) Under-5 mortality rate Target 2015 growth alone East Asia 14 4 100 19 26 Europe and Central Asia 1 15 Latin America 8 95 17 30 Middle East and North Africa 96 25 41 South Asia 22 99 43 69 Africa 24 35 56 59 151 If we look at how close we will come to reaching the MDGs based on growth alone, we find that: In five of the six regions we will reach the poverty goal. The only one we won’t is Africa. But relying on growth alone, we reach the education goal in only two regions. And we will hit the child mortality goal in none of the regions by relying on growth alone. Clearly, we will need more resources to accelerate progress in these areas. But we know that more resources—or more public spending for that matter—will not be enough. Governments need to improve the way they use their spending. Because services are failing poor people. 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 Elasticity assumed between growth and poverty is –1.5; primary completion is 0.62; under-5 mortality is –0.48.

7 Similar changes in public spending can be associated with vastly different changes in outcomes
What this means is that countries that spend the same amount could have vastly different outcomes (e.g., Ethiopia and Malawi). Sources: Spending data from World Development Indicators database. School completion from Bruns, Mingat and Rakatomalala 2003

8 Expenditure incidence
Health Education If you look at health and education spending—usually thought to be pro-poor. In Guinea, 48 percent of public spending on health goes to the richest quintile, while less than 8 percent goes to the poorest. This is one of the areas where we updated the data (most recently available, credible studies) This anti-poor expenditure incidence is reflected in data about access to public facilities. Source: Filmer 2003b

9 How are services failing poor people?
Public spending benefits the rich more than the poor Money fails to reach frontline service providers In Uganda, only 13 percent of non-wage recurrent spending on primary education reached primary schools Even if we can improve the allocation of resources, and build facilities closer to poor people, there is a problem that the money doesn’t reach the frontline service provider.

10 How are services failing poor people?
Public spending benefits the rich more than the poor Money fails to reach frontline service providers Service quality is low for poor people And even if the money reaches the frontline provider, the incentives for delivering good quality services are weak. The clearest manifestation of this is the high levels of teacher and health-worker absenteeism we find in low-income countries.

11 Examples of low service quality
Bangladesh: Absenteeism rates for doctors in primary health care centers: 74 percent Zimbabwe: 13 percent of respondents gave as a reason for not delivering babies in public facilities that “nurses hit mothers during delivery” Guinea: 70 percent of government drugs disappeared To understand these failures in service provision, as well as some of the success stories (which I will tell you about shortly), we need a framework.

12 But services can work Infant mortality and malnutrition reduced in Ceará, Brazil Citywide services in Johannesburg, South Africa reformed Cash transfers to households in Mexico increased enrollment, lowered illness cases Citizen report cards in Bangalore, India Public information campaign to reduce leakage of education funds in Uganda A program in Ceara, by recruiting, training and deploying community health workers, and introducing the Ceara Municipal Seal of Approval award for “child-friendly” municipalities, reduced infant mortality from 100 per 1000 in 1980 to 27 per 1000 in 2001. In 1997, Johannesburg declared bankruptcy. They rationalized the many services—sold some (airport, produce market, etc.), contracted out waste management, sanitation, electricity, etc., and corporatized the zoo. By 2000, the city was solvent and services improved. PROGRESA , covering 40 percent of rural families in Mexico, lowered illness rates by 20 percent among children, and increased enrollment rates by 8 percentage points for girls, 5 for boys. An NGO introduced citizen report cards in Bangalore, which were widely publicized in the press, leading to a response from the state government. These cards have now been launched all over India, and in Ukraine, Philippines, Vietnam. The discovery that only 13 percent of the money reached primary schools led to a campaign that tracked the flow of funds monthly in the newspapers, accompanied by public announcements by Museveni, all of which helped double enrollments in Uganda.

13 A framework of relationships of accountability
Policymakers We call this the long route of accountability. The client influences the policymaker (politician or bureaucrat), and the policymaker has to exert power over the provider. This “long route” is where services break down. But we can also strengthen them by strengthening the two relationships. Poor people Providers

14 A framework of relationships of accountability
Policymakers Let’s start with the citizen-policymaker link. Citizens can exert power over policymakers through elections, and through other means of expressing their “voice.” But even in democratic societies, the provision of (free or subsidized) public services becomes the currency of political patronage and clientelism. Politicians don’t locate pro-poor programs where poor people live necessarily; they locate it where people who vote for them live. Poor people Providers

15 Citizen-policymaker “Pro-Poor” vs. “clientelist” politics
Universal vs. narrowly targeted services Capture Role of informed voting, social polarization, credible politicians in making services work for poor people Role of information

16 Mexico’s PRONASOL, Large social assistance program (1.2 percent of GDP) Water, sanitation, electricity and education construction to poor communities Limited poverty impact Reduced poverty by 3 percent If better targeted, could have reduced it by 64 percent In the late 1980s, Mexico introduced a social assistance program aimed at delivering services to the poor. But the program had a limited impact on poverty. Why? The bureaucrats chose to reward those municipalities that voted for the majority party, which was PRI.

17 PRONASOL expenditures according to party in municipal government
This can be explained by looking at the amount of per-capita PRONASOL expenditures, according to the party that the municipality voted for. This can happen in democratic societies as well as one-party states. And it can work in both kinds (Cuba, China, Sri Lanka, Costa Rica). But the important lesson is that we need to be aware of whether or not the politics in the country will be “Clientelist” or “pro-poor” before designing service delivery mechanisms. Source: Estevez, Magaloni and Diaz-Cayeros 2002

18 Increase in primary school enrollments in Uganda
Ugandans did not vote regionally in the 1996 election vs. Malawi Museveni’s promise of UPE resonated Education was a salient issue for Ugandan voters – candidates to believe they will be judged on whether education promises are fulfilled, education must be important for voters Voters had access to information about performance – press Success in UPE contributed to Museveni’s continued success Afrobarometer: 87% said their government was handling education well, while African average was 59% Macro stability precondition vs. Malawi The power of information Source: Murphy, Bertoncino, and Wang 2002.

19 Schools in Uganda received more of what they were due
First, strengthen poor people’s voice in policymaking by increasing their access to information. In the early 1990s, primary schools in Uganda were receiving less than 13 percent of the money they were allocated for textbooks, equipment, and the like. Poor schools were receiving nothing. To improve this dismal performance, the Ministries of Finance, Education and Local Government jointly launched a public information campaign on fiscal transfers. This created a groundswell of activity to increase the share going to primary schools. The newspapers published the funds flowing to schools on a monthly basis (they still do), and school principals had to post the entire school budget on the schoolroom door. The result was that the share increased from 13 percent to 80 percent. Source: Reinikka and Svensson (2001), Reinikka and Svensson (2003a)

20 A framework of relationships of accountability
Policymakers This is a problem for two reasons: The provider may not have incentives to provide the service. His pay is unaffected by whether or not he provides the service. Absenteeism rates in schools and clinics is an example of this. One way to improve upon this is to make the provider’s pay depend on the service—as in a contract. A good example is from Cambodia. Poor people Providers

21 Policymaker-provider
Delegation, finance, performance, monitoring, and enforcement “Hard to monitor” versus “Easy to monitor” Information for monitoring New type of micro surveys

22 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 An example of where this was overcome is in post-civil-war Cambodia. The government needed to get a health program going in a hurry. So they decided to experiment with three different types of arrangements, two of which used NGOs. In fact, they used two different types of contracts, namely contracting out—where the NGO can use whichever staff they desire; and contracting in, where they NGO had to use existing staff, but could manage them as they wished. Finally, and importantly, they had a control group where the services were run by the government. Before showing the results of this exercise, I want to point out that the Cambodian government decided to randomly assign districts to the different arrangements. This was an explicit case where the government wanted to be able to learn from the experiment in a systematic way. This is an example of a more general theme that is recurring in the WDR. If we are to scale up, we need to be able to learn from these service-delivery innovations in a systematic way.

23 Utilization of facilities by poor People sick in last month
The results are quite dramatic. But contracting out is not always feasible. For one thing, you cannot specify exactly everything in a contract. You can’t specify exactly what teachers teach in the classroom, or what the doctor does in the clinic. In fact, it could be unproductive to do so (as when Parisian taxi drivers bring traffic to a halt in the French capital by following the rules exactly). In this case, you could choose providers who will have an incentive to serve the poor. Faith-based NGOs in Uganda work for 28% lower salary, but provide better quality health services than the public clinics. But the bottom line is that policymakers can best get the incentives right when they can monitor the service provider’s actions and results. When they can’t monitor, however, we should remember that the client can often be the monitor. So we may want to return to the short route of accountability. Source: Bhushan, Keller and Schwartz 2002

24 A framework of relationships of accountability
Policymakers Finally, we turn to the relationship we started with, the “short route”—between client and provider. For even though these are non-market transactions, there may be ways to increase the client’s power over the provider by giving him increased choice and the chance to participate. Poor people Providers

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

26 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

27 EDUCO promoted parental involvement…
…which boosts student performance One of the ways this worked was through a reduction in teacher absence—1.2 (Educo) versus 1.4 (non-Educo) days per month—which resulted in fewer student absences—3 days fewer per month in Educo schools than in Non-Educo schools. Source: Adapted from Jimenez and Sawada 1999

28 Eight sizes fit all? Difficult to monitor Easy to monitor

29 Eight sizes fit all? Difficult to monitor Easy to monitor
Heterogeneous clients Homogeneous clients Emphasizes the heterogeneity of poor people (disabled, women)

30 Eight sizes fit all? Difficult to monitor Easy to monitor
Heterogeneous clients Clientelist politics Pro-poor politics Homogeneous clients And the politics

31 Eight sizes fit all? Difficult to monitor Easy to monitor
Heterogeneous clients Clientelist politics Pro-poor politics Homogeneous clients Government provision or contracting Let’s consider two polar opposite. If the service is easy to monitor (e.g., vaccinations), the government is pro-poor (such as Cuba or Costa Rica or Sri Lanka), and the clients are relatively homogeneous (such as Norway), then central-government provision will work (as will any other arrangement). But if the service is difficult to monitor, such as school teaching, the clients are heterogeneous, and there is evidence of political patronage, such as education in India, then demand-side interventions (such as FSSAP in Bangladesh) coupled with increasing the power of citizens to monitor the provider, such as EDUCO, may yield better results.

32 Eight sizes fit all? Difficult to monitor Easy to monitor
Heterogeneous clients Clientelist politics Pro-poor politics Homogeneous clients Central-government provision Government provision or contracting Let’s consider two polar opposite. If the service is easy to monitor (e.g., vaccinations), the government is pro-poor (such as Cuba or Costa Rica or Sri Lanka), and the clients are relatively homogeneous (such as Norway), then central-government provision will work (as will any other arrangement). But if the service is hard to monitor (such as student learning), then with homogeneous population and pro-poor politics, you may want to have government provision. This is the situation in Scandinavia. Example of homogeneous becoming heterogeneous—immigrants in Sweden. But if the service is difficult to monitor, such as school teaching, the clients are heterogeneous, and there is evidence of political patronage, such as education in India, then demand-side interventions (such as FSSAP in Bangladesh) coupled with increasing the power of citizens to monitor the provider, such as EDUCO, may yield better results.

33 Eight sizes fit all? Difficult to monitor Easy to monitor
Heterogeneous clients Clientelist politics Demand-side subsidies, co-payments by households Pro-poor politics Local-government provision Local-government with contracting Homogeneous clients Central-government provision Government provision or contracting But if the service is difficult to monitor, such as school teaching, the clients are heterogeneous, and there is evidence of political patronage, such as education in India, then demand-side interventions (such as FSSAP in Bangladesh) coupled with increasing the power of citizens to monitor the provider, such as EDUCO, may yield better results. So what does this imply for action? We took your advice and made some bold claims in the report. I’d like to share some of those. Without bold actions, we won’t have scaling up.

34 Making Services Work for Poor People
world development report 2004 Making Services Work for Poor People


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