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How Useful Are Benefit Incidence Analyses of Public Education and Health Spending

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  • Erwin Tiongson
  • Hamid Reza Davoodi
  • Sawitree S. Asawanuchit
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    Abstract

    This paper provides a primer on benefit incidence analysis (BIA) for macroeconomists and a new data set on the benefit incidence of education and health spending covering 56 countries over 1960-2000, representing a significant improvement in quality and coverage over existing compilations. The paper demonstrates the usefulness of BIA in two dimensions. First, the paper finds, among other things, that overall education and health spending are poorly targeted; benefits from primary education and primary health care go disproportionately to the middle class, particularly in sub-Saharan Africa, HIPCs and transition economies; but targeting has improved in the 1990s. Second, simple measures of association show that countries with a more propoor incidence of education and health spending tend to have better education and health outcomes, good governance, high per capita income, and wider accessibility to information. The paper explores policy implications of these findings.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 03/227.

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    Length: 48
    Date of creation: 01 Nov 2003
    Date of revision:
    Handle: RePEc:imf:imfwpa:03/227

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    Related research

    Keywords: Government expenditures; Developing countries; Health care; benefit incidence; health spending; public spending; incidence of public spending; primary health care; incidence analysis; household expenditure; distribution of income; household income; data requirements; household survey; income distribution; public expenditure; data sets; benefit incidence analysis; fiscal policy; public health; access to health care; hospital care; distributional impact; cash transfers; capital spending; household surveys; marginal incidence analysis; poverty line; regional groups; incidence of benefits; incidence of taxes; health service; health financing; health insurance; hospital spending; income groups; social health insurance; public expenditure management; behavioral models; access to services; health expenditure; health policy; analytical challenges; statistical agency; essential drugs; distributional outcomes; household data; infant mortality; data sources; hospital beds; country evidence; public health care; macroeconomic stability; poverty assessments; health care provision; delivery of health care; social safety net; health care system; social impact analysis; poverty reduction strategy; health sector; poverty impact; provision of health care; impact analysis; health clinics; fiscal studies; marginal benefit incidence; capacity constraints; provision of health services; public provision; cash transfer;

    References

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    1. Tanzi, Vito & Zee, Howell H., 2000. "Tax Policy for Emerging Markets: Developing Countries," National Tax Journal, National Tax Association, vol. 53(n. 2), pages 299-322, June.
    2. Atkinson, A.B., 2000. "Increased Income Inequality in OECD Countries and the Redistributive Impact of the Government Budget," Research Paper 202, World Institute for Development Economics Research.
    3. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
    4. Wagstaff, Adam & van Doorslaer, Eddy & Paci, Pierella, 1989. "Equity in the Finance and Delivery of Health Care: Some Tentative Cross-country Comparisons," Oxford Review of Economic Policy, Oxford University Press, vol. 5(1), pages 89-112, Spring.
    5. O'Higgins, Michael & Ruggles, Patricia, 1981. "The Distribution of Public Expenditures and Taxes among Households in the United Kingdom," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 27(3), pages 298-326, September.
    6. Easterly, William, 2000. "the middle class consensus and economic development," Policy Research Working Paper Series 2346, The World Bank.
    7. Ravallion, Martin, 1999. "Are poorer states worse at targeting their poor?," Economics Letters, Elsevier, vol. 65(3), pages 373-377, December.
    8. Lanjouw, Peter & Ravallion, Martin, 1999. "Benefit Incidence, Public Spending Reforms, and the Timing of Program Capture," World Bank Economic Review, World Bank Group, vol. 13(2), pages 257-73, May.
    9. Chu, K.-y. & Davoodi, H. & Gupta, S., 2000. "Income Distribution and Tax, and Government Social Spending Policies in Developing Countries," Research Paper 214, World Institute for Development Economics Research.
    10. Filmer, Deon & Hammer, Jeffrey & Pritchett, Lant, 1998. "Health policy in poor countries : weak links in the chain," Policy Research Working Paper Series 1874, The World Bank.
    11. Devarajan, Shantayanan & Hossain, Shaikh I., 1998. "The combined incidence of taxes and public expenditures in the Philippines," World Development, Elsevier, vol. 26(6), pages 963-977, June.
    12. David E. Sahn & Stephen D. Younger, 1999. "Dominance Testing of Social Sector Expenditures and Taxes in Africa," IMF Working Papers 99/172, International Monetary Fund.
    13. Benedict J. Clements & Gabriela Inchauste & Nita Thacker & Thomas William Dorsey & Shamsuddin Tareq & Emanuele Baldacci & Sanjeev Gupta & Mark W. Plant, 2002. "Is the PRGF Living Up to Expectations?," IMF Occasional Papers 216, International Monetary Fund.
    14. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank.
    15. Ke-young Chu & Hamid Reza Davoodi & Sanjeev Gupta, 2000. "Income Distribution and Tax and Government Social Spending Policies in Developing Countries," IMF Working Papers 00/62, International Monetary Fund.
    16. Howell H. Zee & Vito Tanzi, 2000. "Tax Policy for Emerging Markets," IMF Working Papers 00/35, International Monetary Fund.
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    Citations

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    Cited by:
    1. Nakar Djindil Syntiche & Tabo Symphorien Ndang & Toinar Mogota Anatole, 2007. "A qui profitent les dépenses sociales au Tchad? Une analyse d'incidence à partir des données d'enquête," Working Papers PMMA 2007-11, PEP-PMMA.
    2. Manasan, Rosario G. & Cuenca, Janet S. & Villanueva-Ruiz, Eden C., 2008. "Benefit Incidence of Public Spending on Education in the Philippines," Discussion Papers DP 2008-08, Philippine Institute for Development Studies.
    3. Janet Gale Stotsky, 2006. "Gender Budgeting," IMF Working Papers 06/232, International Monetary Fund.
    4. Mark Gradstein & Era Dabla-Norris, 2004. "The Distributional Bias of Public Education," IMF Working Papers 04/214, International Monetary Fund.
    5. Cuenca, Janet S., 2008. "Benefit Incidence Analysis of Public Spending on Education in the Philippines: A Methodological Note," Discussion Papers DP 2008-09, Philippine Institute for Development Studies.
    6. Maier, Rolf, 2005. "External Debt and Pro-Poor Growth," Proceedings of the German Development Economics Conference, Kiel 2005 23, Verein für Socialpolitik, Research Committee Development Economics.
    7. Bernadette Kamgnia Dia & Simon Leunkeu Wangun & Christophe Tatsinkou & Josephine Afor, 2008. "Bénéfices acquis et ciblage des pauvres dans les dépenses publiques de santé et d'éducation au Cameroun," Working Papers PMMA 2008-08, PEP-PMMA.
    8. Rolf Maier, 2005. "External Debt and Pro-Poor Growth," Macroeconomics 0504031, EconWPA.
    9. Essama-Nssah, B., 2008. "Assessing the redistributive effect of fiscal policy," Policy Research Working Paper Series 4592, The World Bank.
    10. Paulo Silva Lopes, 2005. "The Disconcerting Pyramids of Poverty and Inequality of Sub-Saharan Africa," IMF Working Papers 05/47, International Monetary Fund.
    11. Muhammad Akram & Faheem Jehangir Khan, 2007. "Public Provision of Education and Government Spending in Pakistan," Governance Working Papers 22183, East Asian Bureau of Economic Research.
    12. Gul, Adnan, 2008. "Is external debt an effective way of bringing economic reforms?," MPRA Paper 10979, University Library of Munich, Germany.
    13. Benedict J. Clements & Christopher Faircloth & Marijn Verhoeven, 2007. "Public Expenditure in Latin America," IMF Working Papers 07/21, International Monetary Fund.
    14. Rolf Maier, 2005. "Trade Policy and Pro-Poor Growth," International Trade 0504007, EconWPA.
    15. Waseem IKRAM & Khalid ZAMAN & Mehboob AHMAD & Mohammad Raza Ullah Khan NIAZI, 2011. "The Study Of Healthcare Assessment In Pakistan (1991-2007)," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 7, pages 225-237, May.
    16. Manasan, Rosario G. & Cuenca, Janet S. & Villanueva-Ruiz, Eden C., 2007. "Benefit Incidence of Public Spending on Education in the Philippines," Discussion Papers DP 2007-09, Philippine Institute for Development Studies.

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