World Bank (2004) ‘World Development Report, 2004: Making Basic Services Work for Poor People’

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Precept 9 recommends that government use resource wealth for increasing efficiency and equity in public spending. This can be achieved through investing-in-investing, which in turn requires improved efficiency in recurrent public spending. The World Development Report (WDR) provides us with a framework for how this can be achieved.

 

The WDR begins with the premise that service provision often fails the poor but the fact that this is not always the case means failure is not inevitable. The report builds an analytical and practical framework for using resources more effectively. In understanding how services are delivered it is suggested service delivery be considered as a chain which can be unbundled into three actors and their relationships; these are policymakers, clients and providers. A fundamental explanatory factor in understanding service delivery failure is the accountability problem. Whilst in a market transaction a consumer can hold the provider directly to account, in government service provision this is not the case, occurring only via the long root of policymakers. Depending on whether a political system is pro poor, the clients are homogenous or heterogeneous and whether the output is hard or easy to monitor the paper provides a number of general lessons on making services more effective:

     - In a pro-poor political context services that are easy to monitor can be delivered by the public sector or financed by government and contracted out to the private sector.

     - When services are hard to monitor, politics are pro-poor and clients homogenous then the centralized public sector is most appropriate.

     - When preferences are heterogeneous local government ought to be involved in service delivery.

     - When politics are not pro poor and subject to capture it is best to strengthen the client’s power. 

Access the report here.

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