1. Integration of Economic and Social Policies General framework The role of public spending

2. General Framework Means Objectives How to use means to reach objectives

3. But... Whose objectives? Who controls the means/resources?

4. Objectives Overlap => harmonisation of policies Reduce poverty Respect human rights Improve social development Increase output

5. Means Harmonisation of economic and social polices Good practices =/= recipes Complex causalities One size does not fit all

6. Chile 90s: Unemployment reduction and increase in minimum wage Poverty was reduced because large urban population and formal employment Increase agricultural prices to reduce rural poverty (standard pro-market structural adjustment recommendation) Depends on land tenure distribution and gender division of labour

7. Complex causalities Fiscal Policy Income distribution Output / employment Service delivery Social development

8. Fiscal Policy: What are budgets? Document of intended behaviour Link between financial resources and objectives Set of goals with price tags Mechanism to make choices Plan of action

9. What are budgets? Instrument for ensuring efficiency Network of communication on desires and resources Contract Settlement of political conflict Precedent

10. The role of public spending Governance Synergy Physiocrats’ Produit Net

11. Physiocrats’ Produit Net? Private consumption for reproduction Social services (productive public spending) Private consumption not for reproduction Allocation of production today maintains current situation of despair and inequity

12. Increase resources for productive public spending Private consumption for reproduction Social services (productive public spending) Challenge: maintain incentives for production and political acceptance

13. In terms of productive public spending... What have been national priorities so far?

14. Most countries under-invest in BSS

15. BSS and external debt servicing

16. “How do you allocate $1 million?” Best, only, “technical” solution leads to “neoclassical trap”...

17. …because... …unclear why not $2 million...

18. …and obscures dynamic aspects Time Immediate problem... Cohort 1 Cohort 2 Cohort 1 …linked to intermediate goal

19. What is the reason for observed under- investment? Resources or priority setting?

20. To improve priority setting Important to highlight... Objective –Human rights/universality Political persuasion –enlightened self-interest Synergies

21. Investing in BSS is an inexpensive way of reducing poverty, breaking the poverty cycle, and laying the foundation for strong and equitable growth Girl’s education is critical

22. Synergies:Life cycle of an educated girl

23. Can/should markets be used to provide synergies? Definition: A market is a rationing mechanism Excluded q p D S

24. Productive social spending Means: Produit Net Objectives Synergies; Governance (democracy)