Marketizing Education and Health in Developing Countries: Miracle or Mirage?

Marketizing Education and Health in Developing Countries: Miracle or Mirage?

Marketizing Education and Health in Developing Countries: Miracle or Mirage?

Marketizing Education and Health in Developing Countries: Miracle or Mirage?


This book draws on evidence from a large number of developing countries to assess the impact of market reforms on the provision of education and health services. The contributors show that approaches that seek merely to pass more of their costs to consumers perform less well than is often claimed and that improved cost-effectiveness of health and education systems requires far more than changes in the sources and mechanisms of obtaining finance.


Governments in developing countries have, for some years, faced strong pressures to restrain public spending. National incomes often have not kept pace with population growth, causing public revenues to decline in per capita terms. Debt repayments, having grown rapidly during the 1980s, partly because of rising real interest rates on borrowed funds, have left fewer public resources available for other expenditures. Public sector deficits-- initially excused as a temporary response to the oil crises and subsequent recession--have spiralled, and need to be reduced because their inflationary consequences have further undermined the prospects for a return to growth. Partly as a reaction to these developments, changes in the magnitude and composition of public expenditure have become part of the loan conditions imposed upon developing country governments by the multilateral institutions. Thus, government spending has been placed on a tighter rein, including allocations for the provision of basic services such as health and education.

Over the past two decades, however, additional arguments have been advanced which have more fundamentally questioned earlier patterns of public spending. in particular, the market place, as opposed to the bureaucracy, has been promoted by many critics as the best mechanism for organizing the production and distribution of most goods and services, including many of those that have typically remained within the purview of the state. Although such arguments have always characterized the liberal tradition in economics, they have recently been advanced with greater stridency than in the past, and have also been used to advocate the reduction of public involvement in the provision and financing of education and health services, notwithstanding the important impact these services can have upon the standards of living of the poorest members of the population.

This book, using evidence from a large number of developing countries, asks whether, and to what extent, these recent critics of the public provision and financing of health and education services are correct. It examines the arguments for market reforms in the two sectors, evaluates their effects, and draws conclusions from this experience, of benefit for policy.

Most of the chapters in the book were initially presented as papers at a Workshop on New Approaches to Financing Health and Education Systems in Developing Countries, held at the Institute of Development Studies in March 1994. the original papers were extensively revised after the Workshop, and a number of new ones were commissioned, in order to provide a more comprehensive coverage of the issues. the editor wishes to thank both . . .

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