Have structural adjustments led to health sector reform in Africa?

Abstract

This paper explores the issue of whether and how structural adjustment in Sub-Saharan Africa has altered the level and nature of state involvement in the health care system. Stabilization and structural adjustment generally entail a reduction in aggregate demand, especially government spending, and a reduced role for the state in the provision of many goods and services. Consequently, there is an a priori concern that stabilization and adjustment in Africa may have resulted in lower health expenditures with deleterious effects on the health status of the population, particularly the poor. This paper concludes that structural adjustment programs in Africa did not reduce public health expenditures. In fact, many countries experienced higher real expenditures after adjustment. The fact that many indicators of health status deteriorated during the 1980s, however, presents somewhat of a paradox given the patterns of health expenditures. This paradox is resolved, by an investigation of the intrasectoral allocation of health expenditures which reveals that there are systematic biases in public expenditures towards tertiary and curative care, and a general weakness in the public sector's capacity to deliver adequate health care services even with higher real health sector budgets. In many countries, these biases have persisted despite government and donor intentions to promote health care reform. Finally, the paper reviews a set of policy and institutional issues which hinder the efficient use of budget resources, including overcentralization of health care administration, inappropriate drug and supply procurement practices, the lack of mechanisms for cost recovery, and poor organization, financial and personnel management. At each level of analysis, the paper catalogs those instances where progress is being made towards effective health care reform, including intrasectoral budget rationalization, administrative decentralization, the adoption of user fees for cost recovery, privatization in service delivery, particularly through non-governmental organizations, and organizational and management reform.