Removal of market and external distortions has exposed poor performance of the public sector as one of the most important constraints to growth and poverty reduction in many low-income countries. Public assets and services, when they are measured by output -- that is, when they are actually being delivered -- are found to be important for reducing poverty as well as for private sector growth. This is demonstrated by a large microeconomic literature on households and firms. At the same time, there is another strand of literature which finds that the link between public spending and growth and/or social outcomes is ambiguous at best. This contradiction points to an identification problem: public spending is not necessarily the same as public assets or services. This research explores the transformation mechanism from public expenditure to public goods, using public expenditure tracking surveys (PETS) of service facilities and, in some cases, surveys of firms (the latter on infrastructure services). The PETS typically collects information on facility characteristics, financial flows, outputs, accountability arrangements, etc. The PETS data can have multiple uses, ranging from a simple diagnostic tool for operations to empirical research on capture, and cost-efficiency. As the Bank’s public expenditure reviews need to focus increasingly on the third level of public expenditure, that is, service delivery, the obvious first step is to obtain basic information on the delivery of key public services. In the absence of functioning public accounting information and management information systems, a survey may be the only way to diagnose problems of service delivery quantitatively. Results to date show that information and transparency can be a cost-efficient way of overcoming systemic problems in service delivery. For example, in Uganda where the PETS was pioneered in 1996, the findings pointed to capture of non-wage primary education spending by local bureaucrats. As a result, the central government launch an information campaign both nationally and at the district and school level. A repeat survey in 1999/2000 shows that instead of schools receiving only 20 percent of the non-wage education spending as was the case in 1995, they now receive over 90 percent (although with delays). This remarkable improvement was achieved through government’s efforts to disseminate information both through the media and systematically by posting public spending information at schools and districts. A number of country teams in the Bank have began to implement the PETS. This research, while providing technical support to these teams (Albania, Ghana, Honduras, Macedonia, Mali, Rwanda, and Zambia) to ensure high quality data, is also in the process of setting up a cross-country data base for empirical analysis. The PETS will be carried out in close collaboration with local research institutions in order obtain reliable data and build capacity in diagnostic survey work. Dissemination will include publications (working papers and journal articles) and in-country seminars. Responsibility: DECRG (Public Economics) Ritva Reinikka. Other staff include Jakob Svensson (DECRG and University of Stockholm), Jan Dehn (consultant, UK). Collaborating institutions are: Makerere University (Uganda); and the Bank of Finland, the Helsinki School of Economics, the Bureau of Economic Analysis in Moscow (firm survey in Russia on local government services). Reports - Ablo, Emmanuel, and Ritva Reinikka, 1998, "Do Budgets Really Matter? Evidence from Public Spending on Education and Health in Uganda," World Bank Policy Research Working Paper No. 1926, (Washington: The World Bank).
- Dehn, Jan, Ritva Reinikka, and Jakob Svensson. 2003. “Survey Tools for Assessing Performance in Service Delivery.” In Francois Bourguignon and Luiz Pereira da Silva, eds., Evaluating the Poverty and Distributional Impact of Economic Policies. Oxford University Press and the World Bank. Forthcoming.
- Reinikka, Ritva and Jakob Svensson. "Survey Techniques to Measure and Explain Corruption."
- Reinikka, Ritva. 2000. Recovery in Service Delivery: Evidence from Schools and Clinics in Reinikka Ritva and Paul Collier (eds.), Uganda’s Recovery: The Role of Farms, Firms and Government. Regional and Sectoral Studies, The World Bank, Washington, D.C. Forthcoming.
- Reinikka, Ritva and Jakob Svensson. 2000. "Explaining Leakage of Public Funds." Draft. Development Research Group, (Washington: The World Bank).
- Reinikka, Ritva and Jakob Svensson. 2000. "How Inadequate Provision of Public Infrastructure and Services Affects Private Investment." World Bank Policy Research Working Paper No. 2262, (Washington: The World Bank).
Additional Readings This page was prepared by Ritva Reinikka, (World Bank). |
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