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World Bank Document Toward More Efficient and Effective Public Social Spending in Central America Social Spending in Central Public and Effective Efficient More Toward Public Disclosure Authorized Public Disclosure Authorized DIRECTIONS IN DEVELOPMENT Human Development Acosta, Almeida, Gindling, and Lao Peña Gindling, Almeida, Acosta, Toward More Efficient and Effective Public Disclosure Authorized Public Social Spending in Central America Pablo A. Acosta, Rita Almeida, Thomas Gindling, and Christine Lao Peña Public Disclosure Authorized Toward More Efficient and Effective Public Social Spending in Central America DIRECTIONS IN DEVELOPMENT Human Development Toward More Efficient and Effective Public Social Spending in Central America Pablo A. Acosta, Rita Almeida, Thomas Gindling, and Christine Lao Peña © 2017 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 20 19 18 17 This work is a product of the staff of The World Bank with external contributions. The findings, interpreta- tions, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http:// creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: Acosta, Pablo A., Rita Almeida, Thomas Gindling, and Christine Lao Peña. 2017. Toward More Efficient and Effective Public Social Spending in Central America. Directions in Development. Washington, DC: World Bank. doi:10.1596/978-1-4648-1060-2. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content con- tained within the work. The World Bank therefore does not warrant that the use of any third-party- owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. ISBN (paper): 978-1-4648-1060-2 ISBN (electronic): 978-1-4648-1061-9 DOI: 10.1596/978-1-4648-1060-2 Cover art: © Luís Alegre / ideiascompeso.pt. Used with permission; further permission required for reuse. Cover design: Debra Naylor / Naylor Design Inc. Library of Congress Cataloging-in-Publication Data has been requested. Toward More Efficient and Effective Public Social Spending in Central America http://dx.doi.org/10.1596/978-1-4648-1060-2 Contents Foreword xi Acknowledgments xiii About the Authors xv Abbreviations xix Executive Summary 1 Overview 1 Main Findings 2 Main Recommendations 5 Note 9 Chapter 1 Introduction 11 Notes 13 Chapter 2 Context: Progress and Opportunities for Human Development in Central America 15 Notes 20 References 20 Chapter 3 Recent Trends in Social Spending across the Region and Sectors, 2007–14 23 Notes 35 References 35 Chapter 4 Coverage and Targeting 37 Education Coverage and Targeting 37 Health Care Coverage and Targeting 52 Social Protection and Labor Coverage and Targeting 59 Notes 65 References 66 Chapter 5 Effectiveness and Efficiency of Public Social Services 69 Effectiveness and Efficiency of Education Services 69 Effectiveness and Efficiency of Health Services 78 Toward More Efficient and Effective Public Social Spending in Central America v http://dx.doi.org/10.1596/978-1-4648-1060-2 vi Contents Effectiveness and Efficiency of Social Protection and Labor Spending 84 Cost-Effectiveness of Public Spending: Relating Spending to Outcome 92 Notes 95 References 96 Chapter 6 Selected Institutional and Governance Arrangements in the Social Sectors 99 Education 100 Health 102 Social Protection and Labor 106 Note 109 References 109 Chapter 7 Policy Recommendations 111 Education 111 Health 116 Social Protection and Labor 119 Cross-Sectoral and Cross-Regional Messages 121 Notes 121 References 122 Appendix A Survey Sources, by Country 123 Boxes 4.1 Expanding Health Coverage in Costa Rica, El Salvador, and Panama through Mobile Teams 58 5.1 Politics Matter—Strong Teachers’ Unions Often Fight Changes 77 5.2 Challenges Posed by NCDs to the Costa Rican Health System 79 5.3 Impact of Avancemos CCT in Costa Rica 87 5.4 The Experience of the Red de Protección Social CCT in Nicaragua 88 5.5 The Experience of the PATI in El Salvador 91 5.6 Public Sector Performance (PSP) and Public Sector Efficiency (PSE) Indicators 94 Figures 1.1 Government Revenue Compared with GDP per Capita, 2014 12 1.2 Changes in Revenue and Fiscal Balance (Deficit or Surplus), 2007–14 12 2.1 GDP per Capita, 2000–14 16 2.2 Poverty Rates, 2005–14 17 2.3 Inequality (Gini Coefficient), 2004–14 17 Toward More Efficient and Effective Public Social Spending in Central America http://dx.doi.org/10.1596/978-1-4648-1060-2 Contents vii 2.4 Distribution of Youth, 15–18 Years Old, by Activity (2014 or Most Recent Year) 19 2.5 Distribution of Youth, by Activity and Income Quintile (2012 or Most Recent Year) 20 3.1 Social Expenditure as a Share of GDP, 2007–14 24 3.2 Per Capita Social Public Expenditure, by Sector, 2012 or Latest Year Available 24 3.3 Budget Execution, by Sector, 2007–14 25 3.4 Social Spending as a Share of Total Public Spending in the Subregion, 2007–14 26 3.5 Primary Public Expenditure per Pupil as a Share of GDP per Capita Compared with GDP per Capita 27 3.6 Secondary Public Expenditure per Pupil as a Share of GDP per Capita Compared with GDP per Capita 27 3.7 Public Spending, by Educational Level, as a Share of Education Public Spending in the Subregion, 2014 28 3.8 Preprimary and Primary Public Education Spending in the Subregion, 2007–14 29 3.9 Lower Secondary Public Spending, 2007–14 29 3.10 Upper Secondary Public Spending, 2007–14 30 3.11 Public Spending on Health as a Share of GDP, 2007–14 31 3.12 Public Expenditure on Health as a Share of GDP Compared with GDP per Capita, 2013 31 3.13 Per Capita Public Spending on Health 32 3.14 Share of Hospitals in Public Spending on Health 32 3.15 Share of Public Spending on Health Spent on Salaries 33 3.16 SPL Spending as a Share of GDP, by Country 33 3.17 SPL Spending per Capita, by Country 34 3.18 Social Assistance and Labor Spending as a Share of GDP, 2014 35 4.1 Gross Enrollment Rates across All School Levels in the Subregion, 2007–14 38 4.2 Net Enrollment Rates across All School Levels in the Subregion, 2007–14 38 4.3 Costa Rica Daycare and Preschool Attendance, by Income Quintile, 2014 39 4.4 Preschool Enrollment, by Type, State Compared with Community, Nicaragua, 2009 40 4.5 Teacher Salaries, by Level (National Currency, 2014) 41 4.6 Lower Enrollment Rates after Primary School, Ages 5–20 41 4.7 Average Years of Total Schooling (25+) Compared with GNI per Capita 42 4.8 Secondary Completion Rate, Ages 25+ 42 4.9 Enrollment, by Location, Indigenous Regions, and Income Distribution, Ages 5–20, 2013 43 Toward More Efficient and Effective Public Social Spending in Central America http://dx.doi.org/10.1596/978-1-4648-1060-2 viii Contents 4.10 Youth Attendance Rates, by Type of School, Location, and Income Quintile, Ages 13–18, Honduras, 2013 44 4.11 Public and Private Enrollment, by Income Quintile, Guatemala, 2014 44 4.12 Share of 15–19-Year-Olds Attending Private School, by Income Quintile, Costa Rica, 2014 45 4.13 Computers per Student in Public and Private Schools, Costa Rica 45 4.14 Reasons for Dropping out of School, by Reason Reported 46 4.15 Reasons for Not Attending Secondary School, by Educational Level, 2014 47 4.16 Reasons for Not Attending Upper Secondary School, by Gender, 2014 47 4.17 Reasons for Not Attending Lower Secondary School, by Gender, 2014 48 4.18 Reasons
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