Public spending for children: an empirical note

It is often said that economic growth promotes poverty reduction, social development and child welfare, but it is rarely argued that this conditional relationship applies in reverse. Direct action to improve child health and education may be as strong as economic growth in reducing income-poverty. Without specific policies to ensure access to basic social services (BSS) like basic health, primary education access to safe water-services which directly improve children's lives-economic growth seldom improves the quality of life of the whole population. Thus, it becomes crucial to measure and monitor the allocation of public spending to BSS. In this paper, based on research carried out by UNDP and UNICEF in more than 30 countries across Africa, Asia and Latin America, we summarise some findings of these studies. The figures vary among countries and through time, but public expenditure on BSS is, on average, between 12 and 14 per cent of government spending. Such low fiscal priority to these services partly accounts for the poor health and education outcomes. In many low-income, highly indebted countries, the low level of spending is explained by the lack of fiscal space. Hence the need for debt cancellation at a faster pace than achieved through the HIPC Initiative so far. Data on the use of education and health services by different groups show inequities in the distribution of public spending. This inequity negatively affects overall outcomes. We also look at the allocation of foreign assistance to BSS. ODA has been declining, as a proportion of the output of industrialised countries, since the early 1980s. Within this shrinking total, no DAC country's combined allocation for BSS exceeded 16.5 per cent of ODA. Hence also the need for rapid increases in ODA for basic services. Copyright © 2002 John Wiley & Sons, Ltd.