Measuring Government Inclusiveness: An Application to Health Policy
Tandon, Ajay, Asian Development Review
Abstract. This paper examines the issue of government inclusiveness-i.e., the extent to which a government can be characterized as "pro-poor"-within the context of inequalities in the health sector. The paper discusses different ways of measuring government inclusiveness and argues that benefit incidence analysis comes closest to measuring the extent to which a government can be characterized as pro-poor. Using this perspective, the paper examines broad determinants of government inclusiveness, especially the role of democracy. Analysis of data indicates a positive relationship between democratization and government inclusiveness, even after controlling for additional determinants of "pro-poorness." Ethnic heterogeneity, on the other hand, has a negative effect on government inclusiveness. Overall, the analysis suggests the importance of political freedoms for ensuring that the poor benefit from government programs. In countries with high levels of ethnic diversity, special provisions may need to be made to ensure that elite capture of government expenditure does not occur.
In almost all developing countries, health attainment indicators for the poor tend to be worse than the national average. However, the extent to which such health inequalities exist also varies significantly across countries. Recent empirical evidence suggests that health inequalities have been persistent over time and, in many cases, have been growing (ADB 2006). Some argue that the existence and persistence of large health inequalities is indicative of a lack of resources. The rich can bypass government finance and provision of health in favor of the private sector. The poor are more reliant on the public sector, and governments often do not have enough resources to spend on pro-poor health programs and interventions. Sachs (2004) is a key proponent of this perspective, calling for a massive scaling up of government programs in order to attain health-related Millennium Development Goals.
Others argue that the problem is more of lack of prioritization among governments with regard to the choice and implementation of health policies that are beneficial for the poor. Proponents of this perspective adduce the fact that in many low-income countries, the rich disproportionately capture the benefits of government expenditure on health. This suggests the fundamental problem is not necessarily one of tight resources-although this could be a concern-but a deeper one, more reflective of fundamental political or institutional weaknesses in a country. Hence, addressing the former without addressing the latter would not lead to sustainable solutions.
Given this backdrop, this paper examines the issue of government inclusiveness-i.e., the extent to which a government can be characterized as "pro-poor"-within the context of inequalities in the health sector.1 In recent years, the notion of growth inclusiveness has attracted a great deal of attention from policymakers and academics. The debate has focused, in particular, on issues related to measurement of pro-poor growth, as well as on policy options that could potentially enhance the inclusiveness of growth (Ravallion 2004). More recently, this concept of inclusiveness has been extended to measure and analyze pro-poor governance as well, i.e., whether or not a government is pro-poor as evidenced from its public expenditure allocation priorities. One strand of this literature focuses on the issue of aid effectiveness. Government inclusiveness is measured from the perspective that foreign aid is likely to be more effective in countries with more pro-poor governments (Mosley et al. 2004). Others, such as Kakwani and Son (2006), have examined this issue from more of a targeting efficiency perspective, i.e., in terms of assessing how well a government is doing in reaching the poor with regard to welfare-enhancing policy interventions. This latter framework tends to be more specific, much more suited toward analyzing the pro-poor focus of clearly defined projects. …