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Public Expenditure Reviews - Intro

Tools for Analyzing Public Expenditures in Human Development

Public expenditure reviews (PERs) are tools for analyzing public expenditures in the human development sectors and are part of a larger process to improve the treatment of human development issues. The specific goal of these interlinked PER guidance notes is to support and spark the imagination of people analyzing expenditures in the health, education, and social protection sectors to help them learn from better than average examples and to make it easier to use the many resources already available.

Core GuidanceHealth, Nutrition & PopulationEducationSocial Protection

As part of the World Bank’s country economic and sector work, a PER is undertaken to assist the borrowers in understanding their development problems and potential solutions as well as help illuminate the World Bank’s own country assistance strategy.

One of the major factors contributing to the success of the ensuing country lending program is therefore the quality of analysis undertaken in the PER. In an effort to improve the treatment in PERs of human development issues in general, and education sector issues in particular, the Human Development Network of the World Bank has formulated guidance notes for analyzing public expenditure in the human development sectors.

The main goals of these guidance notes is to spark the imagination of analysts, to help them learn from better than average examples, and to make it easier to find the many resources already available.

Core Guidance and Checklist for All HD Sectors

The objective of this core guidance is to highlight issues common to PERs, regardless of the sector. The issues concern mainly preparation and anticipation, shared considerations and such cross-sectoral questions as the overall budget envelope and tradeoffs between social and other sectors.

Health, Nutrition and Population Guidance on PERs

Public expenditures on health should eventually be justified either because they contribute to a more effective and efficient functioning of the health system or that they contribute to poverty alleviation and redistribution of income. While governments worldwide have played an important role in achieving improved health status of their citizens, there is nevertheless widespread evidence of misallocation of public resources, inefficiency of government expenditures, and the general inability of governments to address equity issues effectively. Public expenditure reviews represent one tool that country teams can use to analyze the level and patterns of health expenditure in a country, assess the effectiveness and equity of this type of public spending, and identify bottlenecks to improve spending in the health sector.

Education Guidance on PERs

Education policy research pays considerable attention to the productivity and efficiency of the education sector, in particular of government expenditure in the sector. Determining how governments and families can best finance and allocate scarce resources to produce quality education and the skills that individuals need for success, is an integral task of the education economists. In this regard, the education sector specifically seeks to answer the following questions in a country's public expenditure analysis:

• How much is spent on education and what is the share of the government's expenditure?

• How do governments finance the education sector and what do they finance?

• Is there equitable distribution of the public resources?

• Is the public getting its money's worth?

• Is the spending adequate and sustainable?

Social Protection Guidance on PERs

Determining how well a safety net functions is a common, but somewhat complex task. The social protection guidance covers the sector as a whole, but all of the issues mentioned are applicable to the subset of social protection comprised by safety net programs, and many of the examples and comparators provided are for safety nets. The guidance is divided into two parts: consideration of the system of complementary programs and analysis of how well each individual program functions. The guidance is divided into three sections:

• A checklist of issues that might be included in analysis;

• Notes with elaboration or references to standards, methodological guidance or international comparators; and

• Examples of the treatment of each specific issue drawn from a large body of analytic work done within the World Bank.

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