Public Expenditure Review Research Articles

Influence of Budget Allocations within Government Budget Execution on Market Participation: Case of Maize in the Southern Highland regions of Tanzania

Government budget allocations within budget execution are important in pushing the agricultural transformation agenda in Tanzania. However, agriculture public expenditure review studies show that with the exception of a few geographical areas in Tanzania, government budget allocations have generally been insufficient to bring about the desirable transformation from subsistence to commercial agriculture. Thus, this paper investigates the pivotal role of government budget allocations within budget execution in facilitating the commercialisation of maize, a crop that is both a major food and cash crop in Tanzania. It also assesses the factors that affect the performance of budget allocations. The descriptive survey design was employed whereby a cross-sectional survey was conducted to collect data from 180 local government officials in the Mbeya and Songwe regions that were sampled in the southern highland regions. Data was analysed through descriptive statistics and multiple regression using Statistical Package for Social Sciences (SPSS) software. The mean and standard deviation were used to measure budget allocations via the interpretation of means by Weak (Wk) and Strong (St). The findings show that the means of budget allocations were strong, and all four variables under it exerted a positive influence on maize commercialisation as measured through market participation. From the parameter estimates, standardised beta coefficient values were 0.468, 0.091, 0.030 and 0.167, respectively. In addition, the findings also show and confirm the requirement of the Maputo Declaration of 2003, which was reiterated by the Malabo Declaration of 2014, for governments in Africa to allocate at least 10% of their national budgets to agriculture. Based on the findings, the researchers conclude that effective and efficient budget allocations within budget execution are essential for achieving government development goals and objectives, including the transformation of agriculture from subsistence to commercial. It is recommended that the government should strengthen the budget execution process at all levels of government

Impact of taxes and transfers on inequality in the Asia-Pacific region

Governments that aim to adjust their fiscal policies to reduce inequality can look to several analytical tools that are being produced in Asia-Pacific countries, including commitment to equity studies and public expenditure reviews. The present paper contains a review of studies for 12 Asia-Pacific countries. Consistent with previous research on the impact of fiscal policies on inequality, the findings of the review show that policies such as targeted direct transfers, education spending and tax policies that favour direct instead of indirect taxes are most effective at inequality reduction.

Эффективность региональных бюджетных расходов на образование и здравоохранение: оценка с позиции граждан

International comparisons demonstrate that Russia lags behind OECD countries in terms of citizen satisfaction with the quality of public services in education and healthcare. However, traditionally public perceptions of the quality of service delivery are not taken into account when evaluating public expenditures. Given the overall client centricity trend in the Russian public administration, the assessment of public expenditures on the basis of citizens’ satisfaction with the quality of public services is highly relevant. The paper proposes and implements an approach to evaluating the efficiency of public expenditures on primary and secondary education and primary healthcare based on the ratio of citizens’ satisfaction with the quality of public services and per capita expenditures from regional consolidated budgets. The authors demonstrate that citizens’ perceptions weakly correlate with the level and dynamics of budget expenditures on primary and secondary education and primary healthcare services. Thus, citizens’ priorities and expectations are not fully accounted for in the budgeting process. The proposed approach helped to identify Russian regions with high and low efficiency of public spending on primary and secondary education and primary healthcare. It is recommended to use this approach as a diagnostic tool for identifying regions and sectors requiring in-depth public expenditure review and to expand the proposed approach to evaluate public spending from citizens’ perspective in other areas.

Influence of population density and access to sanitation on Covid-19 in Mozambique

In 2020, as COVID-19 spread through the world, prestigious entities published faulty predictions about the level of dissemination, especially when describing African countries and others with “weak healthcare systems.” How could the best fall so short, even when using well-known epidemiological variables to predict the behavior of a hygiene-related malady? It might have been due to insufficient data since COVID-19 was a novelty, still poorly understood. The current study aimed to analyze how two variables – population density and percentage of people with access to improved sanitation – affected the number of confirmed COVID-19 cases in Mozambique by February 2021, almost one year since the country's first case. All data were publicly available: population density in Census 2017, access to sanitation in the Mozambique Public Expenditure Review 2014, and the number of COVID-19 cases in the Ministry of Health’s COVID-19 daily bulletin (no. 332). JASP 0.13.1.0 allowed correlating all variables, and Microsoft Excel™ was the choice to perform fitting analysis to model the algebraic relationship between the number of cases and the other variables. The cases showed a positive correlation (r = 0.663) with density, and their relationship was consistent with a cubic function. Sanitation coverage also showed a positive correlation (r = 0.679), but the most straightforward algebraic representation was a quadratic function. The impact of population density on the number of COVID-19 cases was intuitive, but the logic points towards the highest number of cases where sanitation facilities lacked the most. Perhaps the influence of other factors outweighed the effect of sanitation, or people tend to be careless before the sense of security where the sanitation is better. These findings can support predictions and decision-making, and the population needs to abide by the Government’s recommendations.

Identifying Major Health-System Challenges in Developing Countries Using PERs: Equity is the Elephant in the Room

ABSTRACT Despite an unprecedented increase in official development assistance to health in the last 25 years, there is no systematic way to assess dominant patterns in health-system challenges and opportunities in developing countries. Developing a new global instrument for and by donors and development partners would be resource-intensive and cumbersome. In this article, we demonstrate that Public Expenditure Reviews (PERs) can be used to reveal such patterns. PERs are analytical reports financed and conducted by the World Bank that have been used for years to identify and prioritize country-specific health sector reform needs. In order to extend their use beyond the country level, a reading instrument is developed in the form of a questionnaire to systematically identify the different themes addressed in each PER. All PERs published over a period of ten years are reviewed for health sector content. A new database is created with data on 70 PERs, spanning 61 countries. Analysis of the data reveals dominant themes globally, patterns across development levels, and some regional variations. Our main finding is that issues related to equity strongly dominate and are relevant across all regions and income groups. In addition, the article highlights the usefulness of PERs beyond providing country-specific information. Without losing the country-focus and flexibility of PERs, thoughtful and minor investments in how Health PERs are conducted can create a relatively cheap and strongly operational instrument for building global knowledge bases on health sector needs and challenges.

Discussing the blue economy: considerations from a public expenditure review on tax exemption and subsidies

How should one assess whether traditional ocean industries and new ocean emerging activities have the right incentives to engage into a blue sustainable economy path? The case of Brazil’s Public Expenditure Review (PER) of tax exemption and subsidies applied to ocean related economic activities from 2011 to 2018 opens the debate. The extra-budgetary PER is applied with the Rio Markers from Organization for Economic Co-operation and Development (OECD), the economic activities listed by the World Bank´s Blue Economy, Ocean Decade’s results and Sustainable Development Goal 14 targets. The data on tax exemption and subsidies was obtained from official sources, from the Federal Government Budget System maintained by the Ministry of Economy. The screening was carried out for all national level tax relief and subsidies applied during 2011 and 2018. There were 316.4 billion reais (US$ 80.2 billion) spent by Brazil’s Federal government on ocean-related economic activities, either directly or indirectly, through subsidies and tax relief over 2011-2018. The accumulated GDP over that period was equivalent to 45.9 billion reais (US$ 11.6 billion). The sector that most benefitted is Agriculture (includes fishing), which received around 229.1 billion reais (US$ 58.0 billion) in incentives during this period. As for the method, it is necessary to develop and establish standardized ocean related markers in the economy and in PER reviews.

Analysis of out-of-pocket health expenditure using the WHO Global Health Expenditure Database (GHED): A systematic review

Introduction: Tracking out-of-pocket (OOP) health expenditure is a very useful reference for knowing the progress of countries in the goal of universal health coverage (UHC) in 2030. The World Health Organization (WHO) has developed the Global Health Expenditure Database (GHED) to facilitate analysis of health financing in countries or regions. The paper explores the use of GHED in the analysis of OOP health expenditure in the specialized literature. Objective: To perform a systematic review of the studies in which GHED is used to analyze OOP health expenditure in countries or groups of countries. Methods: The systematic review followed the guidelines of the Preferred Reporting Items for Systematic Review and Meta-analyses (PRISMA). The database used was PubMed. All publications that were available on PubMed by July 30, 2020, were identified. Results: Twenty-five papers were identified. The use of the GHED to analyze OOP health expenditure was reported in five studies, one country study, and four studies with regional comparisons. The included studies cover the period 1995-2016. Discussion: The use of the GHED for the analysis of the evolution of OOP health expenditure in countries or regions is not very widespread in the specialized literature. The GHED has proven to be a very useful instrument for international comparison, although the fact that there are differences with national reports (public expenditure reviews) makes it advisable to combine both sources of information in the analysis of country- specific health policies. Conclusion: The systematic use of the GHED can be useful to improve the quality of information and estimates, such as country-specific expenditure analyses. To this end, it is particularly important to characterize the levels of OOP health expenditure and to incorporate policy monitoring into the analyses.

Public expenditure for agricultural sector in Russia: Does it promote growth?

This paper presents the findings of the agriculture public expenditure review (PER) for the Russian Federation. It reviews the policy instruments and historical trends in the volumes and composition of budget support and investigates their role in recent agricultural growth. The paper also analyzes the effect of public spending in 2006–2017 on growth in agriculture using the fixed effects model and find positive effect. Support for general services is the most efficient method of agricultural spending, but in the Russian agricultural budget the subsidies to individual producers prevail. While the prevalence of the subsidies in the budget benefits the largest and most successful producers, this was part of the strategy to create strong value chains in order to compete with imports. However, the efficiency of investment support is decreasing. The paper explores the distribution of support between national and sub-national levels of budgeting system, and finds that the regionalization of support leads to market disintegration and efficiency losses.

CAN THE GAMBIA ECONOMY CATCH-UP WITH DEVELOPED ECONOMIES IN THE LONG-RUN?: A Time-Series Test of the Convergence Hypothesis and Endogenous Growth Model with Human Capital

This paper seeks to answer the question of how The Gambia economy can catch-up with developed economies. The convergence hypothesis implied by the Solow-type (1956) neoclassical model has been questioned by endogenous growth theories mainly in the context of a long-run growth path. One concept says convergence applies if poor economies tend to grow faster than the rich ones so that the poor tend to catch-up with the rich in terms of the level of per capita income. A recent research conducted by the Education Global Practice of The World Bank Group on the public expenditure review (PER) in the education sector in The Gambia made many recommendations on improving human capital development in the Gambia that need empirical clarifications. This paper provides an empirical and theoretical support and justification for the implementation of the recommendations. The paper conducted test of the convergence hypothesis using a series of Cobb-Douglas production models on Gambia using the U.S. economy as the base economy. Time series data on real GDP, Capital stock. Human capital stock and labor were collected for the period 1970 to 2016. The study employed the classical least square regression after establishing the levels of integration of the variables. The study was able to establish that the Gambia economy has the tendency of “catch-up” with developed economy under the condition of improved and sustained human capital development. To achieve this, the paper lends credence to the recommendations of the PER that education budget should be increased in the medium to long term. Convergence may be observed for Gambia economies if it intensifies on subsidies for education, research and development.

Vietnam Public Expenditure Review in the Period of 2007-2017 and Some Recommendations

This study explores the current situation of public spending of Vietnam in the period from 2007 to 2017. The results show that the total state budget expenditure has increased over the past 10 years; however the growth rate of public expenditure has reduced. The state budget deficit and the ratio of public debt to GDP have remained at a high level. The analysis also indicates that there has been an increase in the proportion of recurrent spending in total state budget expenditure. By constract, the percentage of investment expenditure tends to decrease. Expenditures on health, education and science and technology have risen in recent years.
 Keywords
 Public expenditure, budget deficit, public debt, development investment expenditures, recurrent expenditures
 References
 [1] Barro, Robert J., “Government spending in a simple model of endogeneous growth”, Journal of Political Economy 98 (1990) 5: 103-125.[2] Ngân hàng Thế giới, “Đánh giá chi tiêu công Việt Nam: Chính sách tài khóa hướng tới bền vững, hiệu quả và công bằng”, 2017.[3] Ngân hàng Thế giới, “Cải thiện hiệu suất và công bằng trong chi tiêu công”, 2017.[4] Sanjeev Gupta, Benedict Clements; Emanuele Baldacci and Carlos Mulas-Granados, “Fiscal Policy, Expenditure Composition and Growth in Low-Income Countries”, Journal of International Money and Finance, 24 (2005) 3, 441-463.[5] Vũ Sỹ Cường, “Cải cách chi tiêu công: Từ lý luận đến thực tiễn ở Việt Nam”, Viện Chiến lược và Chính sách Tài chính, 2018.

Who Needs Big Health Sector Reforms Anyway? Seychelles’ Road to UHC Provides Lessons for Sub-Saharan Africa and Island Nations

The road to universal health coverage (UHC) needs not be driven by big reforms that include the initiation of health insurance, provider–funder separation, results-based financing, or other large health sector reforms advocated in many countries in sub-Saharan Africa and elsewhere. The Seychelles experience, documented through a series of analytical products like public expenditure reviews and supporting surveys with assistance from the World Bank and World Health Organization (WHO), shows an alternative, more incremental reform road to UHC, with important lessons to the region and other small-population or island nations. Done well, in some countries, a basic supply-side funded, publicly owned and operated, and integrated health system can produce excellent health outcomes in a cost-effective and sustainable way. The article traces some of the factors that facilitated this success in the Seychelles, including high political commitment, strong voice and a downward accountability culture, strong public health functions, and an impressive investment in primary health care. These factors help explain past successes and also provide a good basis for adaptation of health systems to dramatic shifts in the epidemiological and demographic transitions, disease outbreaks, and rising public expectation and demand for high quality of care. Once again, how the Seychelles responds can show the way for other countries in the region and elsewhere regardless of the types of reforms countries engage in.

What Are Governments Spending on Health in East and Southern Africa?

Progress toward universal health care (UHC) in Africa will require sustained increases in public spending on health and reduced reliance on out-of-pocket financing. This article reviews trends and patterns of government spending in the East and Southern Africa regions and points out methodological challenges with interpreting data from the World Health Organization’s (WHO) Global Health Expenditure Database (GHED) and other sources.Government expenditure for health has increased for most countries, albeit at a slower rate than gross domestic product (GDP). In most countries there has been a prioritization away from health in government budgets, putting the onus on the private sector and donors to fill the gap. Donor support is important in the region but reliance on external spending is not consistent with countries’ stated ambitions of universal health coverage.A number of methodological challenges with estimating health expenditures are identified. Capturing health expenditures adequately across agencies and levels of decentralization can be challenging, and off-budget funds and arrears are evasive. Measurement error can be significant because actual expenditure information can be hard to come by and is often dated and unreliable. Furthermore, how external financing is captured will affect government health expenditure estimates. These factors have contributed to differences in expenditure estimates between the WHO GHED and country-specific public expenditure reviews and complicate interpretation. The article concludes that it is critical to strengthen national data capacity and international efforts to promote quality and consistency of data. The GHED is an invaluable resource for monitoring and benchmarking health expenditures. It is best used in combination with deep dive country expenditure assessments.

Is Development Assistance for Health fungible? Findings from a mixed methods case study in Tanzania

The amount of Development Assistance for Health (DAH) available to low- and middle-income countries has increased exponentially over the past decade. However, there are concerns that DAH increases have not resulted in increased spending on health at the country level. This is because DAH may be fungible, resulting from the recipient government decreasing its contribution to the health sector as a result of external funding. The aim of this research is to assess whether DAH funds in Tanzania are fungible, by exploring government substitution of its own resources across sectors and within the health sector.A database containing 28140 projects of DAH expenditure between 2000 and 2010 was compiled from the Organisation for Economic Co-operation and Development’s Creditor Reporting System (OECD-CRS) and AidData databases. Government health expenditure data for the same period were obtained from the Government of Tanzania, World Bank, public expenditure reviews and budget speeches and analysed to assess the degree of government substitution. 22 semi-structured interviews were conducted with Development Partners (DPs), government and non-government stakeholders between April and June 2012 to explore stakeholder perceptions of fungibility.We found some evidence of substitution of government funds at the health sector and sub-sector levels and two mechanisms through which it takes place: the resource allocation process and macro-economic factors. We found fungibility of external funds may not necessarily be detrimental to Tanzania’s development (as evidence suggests the funds displaced may be reallocated to education) and the mechanisms used by DPs to prevent substitution were largely ineffective.We recommend DPs engage more effectively in the priority-setting process, not just with the Ministry of Health and Social Welfare (MoHSW), but also with the Ministry of Finance, to agree on priorities and mutual funding responsibilities at a macroeconomic level. We also call for more qualitative research on fungibility.

Kosovo Public Expenditure Review

During most of the 2000s, Kosovo has pursued a highly conservative fiscal policy, restraining expenditures as revenues continued to climb. The Government has now shifted toward an expansionary expenditure policy. In the short term, the Government intends to finance the resulting budget deficits from accumulated savings and borrowing, as well as through the sale of assets and donor support. Neither solution is sustainable. In principle, there is room to increase revenues - Kosovo’s tax burden is low by regional standards. But the weakness of domestic tax instruments makes this difficult. Restraint on the expenditure side will be required. Given the well-documented shortcomings of public services in Kosovo, this will require an improvement in the quality of public expenditure - an improvement in the efficiency of public service delivery - rather than a reduction in the quantity or quality of services. This report looks for such opportunities in the major programs of Government expenditure: education, health, social assistance, transport and energy.

Spending for Development: making the most of Indonesia's new opportunities - Indonesia Public Expenditure Review - By The World Bank

Spending for Development: making the most of Indonesia's new opportunities - Indonesia Public Expenditure Review - By The World Bank

Institutional Evaluation and Policy Evaluation of Public Financial Management in Developing Countries: PFM Assessment and Public Expenditure Review

Institutional Evaluation and Policy Evaluation of Public Financial Management in Developing Countries: PFM Assessment and Public Expenditure Review

First Results of National Health Accounts (NHA) of Serbia 2003, 2004, 2005

Background: Serbia has a health system financed by earmarked payroll taxes via the National Health Insurance Fund (NHIF). Providers are mostly public and contracted by NHIF. The viability of the system is challenged by the reduced financial basis of health insurance contributions and transparency of both public and private sector (2 million employed financing 7 million insured). Objective: To increase transparency of financial resources allocation by National health accounts in order to determine and compare Nation's overall health spending patterns. Aim: To provide policy makers with international comparable indicators, analysis and recommendations based on the information received and processed. Material and methods: There are multiple sources of health care data which were linked applying the rules of A System of Health Accounts (SHA) Version 1.0. Data are obtained from Public expenditure Reviews, Administrative data, Household Budget Surveys, and Provider Surveys. Results: The full three-dimensional table HFxHPxHC was compiled for the years 2003 and 2004. First estimates are available for 2005. The results confirm that NHIF is the predominant financing agent for health care. In 2004 about 66% of expenditures are financed by NHIF, 5, 5% by the Government, 0, 85% are financed from abroad. Private spending makes 25, 39% of total spending and particularly high for pharmaceuticals, 62, 27%. The share of GDP devoted to health care was 9, 37%. However, per capita spending for health was relatively low, $224, 29 ppp. Discussion: The compilation of health accounts was in many ways useful. It increased transparency among the financial flows within public sector. Also, for the first time private sector of providers and financers was observed. One major problem in the existing pilot compilations are some inconsistencies in relation to non-financial data. Conclusions and recommendations In order to check inconsistencies it is necessary to control data flows bottom-up. Full access to the relevant information is indispensable. Data reporting might be biased by vested interests of stakeholders. It is therefore necessary to develop safeguards for reliable data delivery and analysis.

PUBLIC ENVIRONMENTAL EXPENDITURES IN INDONESIA

The economic justification for public expenditure is especially strong in the case of environmental management. Yet expenditures on environmental management have received little attention in public expenditure reviews by the World Bank and other international development organisations. An initial analysis of environmental expenditures in the Indonesian government budget between FY1994/95 and FY1998/99 yields four basic findings. First, most spending in the nominal environmental sector, sector 10 (Environment and Spatial Planning), is on non-environmental activities, and much environmental expenditure occurs in other budget sectors. Second, environmental expenditures fell sharply in real terms during the economic crisis, to levels far below those in FY94/95. Third, they also fell sharply relative to the budget and to GDP. Finally, environmental expenditures declined more in Indonesia during the economic crisis than in Malaysia, Thailand and Korea, relative to both the budget and GDP.

"All Decisions Are Top-Down:" Engendering Public Expenditure in Vietnam

Between October 1999 and June 2000 a joint government-donor working group undertook a public expenditure review in Vietnam that was supposed to use "gender issues" as a cross-cutting theme. The article discusses ways in which a gender analysis could have been incorporated into a review of public expenditure, and examines why this did not happen in the end. Flaws in the process reduced the scope of gender analysis. Institutional constraints on the part of both the government and the World Bank weakened the commitment to a gender analysis. More fundamentally, however, it is argued that the methodological approach of the World Bank rendered it incapable of investigating possibly unquantifiable macrostructural and mesoinstitutional determinants of individual behavior. It is further argued that the conceptualization of social institutions offered by the World Bank with regard to gender relations fails to adequately express the extent to which social institutions are gendered.

BEYOND RATE OF RETURN: REORIENTING PROJECT APPRAISAL

Traditional approaches to project appraisal fail in practice to address two fundamental questions: whether a project belongs in the public or the private sector; and what effect any external assistance associated with the project has on the country's development. The first issue is of general interest to both national policymakers and international donors. If the government provides a good or service that will otherwise have been provided by the private sector, the net contribution of the public project could be low. The second issue is of particular concern to donors. If financial resources are fungible, the project being appraised might well have been undertaken without external financing. In this case, donor funds are actually financing some other, unappraised project. Both cases argue for a shift in the emphasis of project evaluation away from a concern with precise rate-of-return calculations and toward broader sectoral analyses and public expenditure reviews. In this context, three areas critical for proper project appraisal include a consideration of the rationale for public intervention, the fiscal impact of the project, and the fungibility of external assistance.