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560530Wp0box341penditurefis HNP DISCUSSIO N P A P ER Public Disclosure Authorized Assesing Public Expenditure on Health From a Fiscal Space Perspective Public Disclosure Authorized Ajay Tandon and Cheryl Cashin About this series... This series is produced by the Health, Nutrition, and Population Family (HNP) of the World Bank’s Human Development Network. The papers in this series aim to provide a vehicle for publishing preliminary and unpolished results on HNP topics to encourage discussion and debate. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. Citation and the use of material presented in this series should take into account this provisional character. For free copies of papers in this series please contact the individual authors whose name appears on the paper. Enquiries about the series and submissions should be made directly to Public Disclosure Authorized the Editor Homira Nassery ([email protected]) or HNP Advisory Service ([email protected], tel 202 473-2256, fax 202 522- 3234). For more information, see also www.worldbank.org/hnppublica- tions. THE WORLD BANK 1818 H Street, NW Public Disclosure Authorized Washington, DC USA 20433 Telephone: 202 473 1000 Facsimile: 202 477 6391 Internet: www.worldbank.org E-mail: [email protected] February 2010 ASSESING PUBLIC EXPENDITURE ON HEALTH FROM A FISCAL SPACE PERSPECTIVE Ajay Tandon Cheryl Cashin February, 2010 Health, Nutrition and Population (HNP) Discussion Paper This series is produced by the Health, Nutrition, and Population Family (HNP) of the World Bank's Human Development Network. The papers in this series aim to provide a vehicle for publishing preliminary and unpolished results on HNP topics to encourage discussion and debate. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. Citation and the use of material presented in this series should take into account this provisional character. For free copies of papers in this series please contact the individual author(s) whose name appears on the paper. Enquiries about the series and submissions should be made directly to the Editor, Homira Nassery ([email protected]). Submissions should have been previously reviewed and cleared by the sponsoring department, which will bear the cost of publication. No additional reviews will be undertaken after submission. The sponsoring department and author(s) bear full responsibility for the quality of the technical contents and presentation of material in the series. Since the material will be published as presented, authors should submit an electronic copy in a predefined format (available at www.worldbank.org/hnppublications on the Guide for Authors page). Drafts that do not meet minimum presentational standards may be returned to authors for more work before being accepted. For information regarding this and other World Bank publications, please contact the HNP Advisory Services at [email protected] (email), 202-473-2256 (telephone), or 202-522- 3234 (fax). © 2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 All rights reserved. ii Health, Nutrition and Population (HNP) Discussion Paper Assessing Public Expenditure on Health From a Fiscal Space Perspective: Ajay Tandona and Cheryl Cashinb a EASHH, World Bank, Washington DC., USA b HDNHE Consultant, World Bank, Washington DC., USA Abstract: This document delineates a simple conceptual framework for assessing fiscal space for health and provides an illustrative roadmap for guiding such assessments. The roadmap draws on lessons learned from analyses of seven fiscal space case studies conducted over the past two years in Cambodia, India, Indonesia, Rwanda, Tonga, Uganda, and Ukraine. The document also includes a summary of the fiscal space assessments from these seven case studies. Any assessment of fiscal space typically entails an examination of whether and how a government could feasibly increase its expenditure in the short-to-medium term, and do so in a way that is consistent with a country’s macroeconomic fundamentals. Although fiscal space generally refers to overall government expenditure, for a variety of reasons there has been growing demand for a framework for analyzing fiscal space specifically for the health sector. This document outlines ways in which generalized fiscal space assessments could be adapted to take a more health-sector specific perspective: What is the impact of broader macroeconomic factors on government expenditures for health? Are there sector-specific considerations that might expand the set of possible options for generating fiscal space for health? Are there country-specific examples of innovative strategies that have been successful in increasing fiscal space for health? Keywords: fiscal space, health expenditure, resources for health. Disclaimer: The findings, interpretations and conclusions expressed in the paper are entirely those of the authors, and do not represent the views of the World Bank, its Executive Directors, or the countries they represent. Correspondence Details: Ajay Tandon, World Bank, 1818 H St. NW., Washington DC. 20433 USA, tel: 202-473-6338, Email: [email protected], website: www.worldbank.org iii iv Table of Contents ACKNOWLEDGEMENTS ....................................................................................................... vii PART I – INTRODUCTION AND BACKGROUND ............................................................... 8 DEFINING FISCAL SPACE FOR HEALTH ......................................................................................... 11 PART II - A ROADMAP FOR ASSESSING FISCAL SPACE FOR HEALTH ................. 17 COMPONENT 1: IDENTIFYING THE NEED FOR ADDITIONAL FISCAL SPACE FOR HEALTH ................. 17 COMPONENT 2: ASSESSING THE POTENTIAL FOR INCREASING FISCAL SPACE FROM THE FIVE PILLARS ................................................................................................................................................... 23 Conducive Macroeconomic Conditions ................................................................................ 23 Re-Prioritization of Health .................................................................................................... 29 Increase in Health Sector-Specific Resources ....................................................................... 31 Health Sector-Specific Grants and Foreign Aid .................................................................... 35 Increase in Efficiency of Health Expenditures ...................................................................... 39 COMPONENT 3: SUMMARY AND CONCLUSIONS ............................................................................. 42 PART III - CASE SUMMARIES .............................................................................................. 44 CAMBODIA .................................................................................................................................. 44 Background ............................................................................................................................ 44 Analysis of Fiscal Space using the Five Pillars ..................................................................... 45 Conclusions and Recommendations ...................................................................................... 47 INDIA .......................................................................................................................................... 48 Background ............................................................................................................................ 48 Analysis of Fiscal Space Using the Five Pillars .................................................................... 49 Conclusions and Recommendations ...................................................................................... 53 INDONESIA .................................................................................................................................. 54 Background ............................................................................................................................ 54 Analysis of Fiscal Space Using the Five Pillars .................................................................... 55 Conclusions and Recommendations ...................................................................................... 57 RWANDA ..................................................................................................................................... 58 Background ............................................................................................................................ 58 Analysis of Fiscal Space Using the Five Pillars .................................................................... 59 Conclusions and Recommendations ...................................................................................... 61 TONGA ........................................................................................................................................ 62 Background ...........................................................................................................................
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