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Eliminating Human Poverty

Eliminating Human Poverty

Santosh Mehrotra | Enrique Delamonica


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This book focuses on the provision of basic social services - in particular, access to education, health and water supplies - as the central building blocks of any human development strategy. The authors concentrate on how these basic social services can be financed and delivered more effectively to achieve the internationally agreed Millennium Development Goals. Their analysis, which departs from the dominant macro-economic paradigm, deploys the results of broad-ranging research they led at UNICEF and UNDP, investigating the record on basic social services of some 30 developing countries. In seeking to learn from these new data, they develop an analytical argument around two potential synergies: at the macro level, between poverty reduction, human development and economic growth, and at the micro level, between interventions to provide basic social services. Policymakers, they argue, can integrate macro-economic and social policy. Fiscal, monetary, and other macro-economic policies can be compatible with social sector requirements. They make the case that policymakers have more flexibility than is usually presented by orthodox writers and international financial institutions, and that if policymakers engaged in alternative macro-economic and growth-oriented policies, this could lead to the expansion of human capabilities and the fulfillment of human rights. This book explores some of these policy options. The book also argues that more than just additional aid is needed. Specific strategic shifts in the areas of aid policy, decentralized governance, health and education policy and the private-public mix in service provision are a prerequisite to achieve the goals of human development. The combination of governance reforms and fiscal and macro-economic policies outlined in this book can eliminate human poverty in the span of a generation.
Santosh Mehrotra is a human development economist educated at the New School for Social Research, New York, and the University of Cambridge where he did his doctorate. He was Associate Professor in Jawaharlal Nehru University, New Delhi, before moving to the United Nations in 1991. For the past 15 years he has worked on the human impact of macro-economic policy. He led UNICEF's research programme on economic and social policy on developing countries at the Innocenti Research Centre, Florence, 1999-2002. He was a co-author of the Human Development Report (2002-2004) and Regional Economic Adviser for Poverty for the Asia region (2005-6). His books include: India and the Soviet Union: Trade and Technology Transfer (1990); Development with a Human Face: Experiences in Social Achievement and Economic Growth (with Sir Richard Jolly) (1997); Le Developpement a Visage Humain (2001); Universalizing Elementary Education in India: Uncaging the Tiger Economy (2005) (coauthored); The Economics of Elementary Education in India, ed. (2006); and Asian Informal Workers: Global Risks, Local Protection (with M. Biggeri) (2006). He is currently advisor to the Planning Commission, Government of India, and is involved in writing India's 11th Five Year Plan (2007-2011). Website: Enrique Delamonica is an economist and political scientist educated at the University of Buenos Aires, Columbia University, and the New School for Social Research. For almost 15 years, as a consultant for UNICEF and UNDP and a policy analyst in UNICEF Headquarters, he has worked on the impact of macroeconomic policies on children, poverty reduction strategies, financing of social services and budget allocations, the analysis of trends in socio-economic disparities, child poverty measurement, and social protection policies. He has published widely, including two co-edited books on issues of social policy, particularly as they affect children. He has also taught economics, international development, policy analysis and research methods at New York University, Columbia University, the University of Buenos Aires, the Institute for Social and Economic Development (Argentina), and the New School. Currently he teaches at Saint Peter’s College in New Jersey.
'This book has an ambitious agenda. It offers a framework for conceptualizing macroeconomic policies on the assumption that people matter. The authors demonstrate a sure grasp of the complexities of policy-making to reduce poverty. This book offers an indispensable guide to policy makers and development practitioners.' Professor Ajit Singh, Faculty of Economics, University of Cambridge 'This book gets to the core of what will be needed to revive economic growth after the slowdown in much of the developing world over the last 25-30 years - by reversing the deflationary tendency of much contemporary macroeconomic policy.' Jomo K. S., Assistant Secretary-General for Economic Development, UN Department of Economic and Social Affairs 'A vital reference for donors, NGOs and others wanting to see the MDGs achieved - but uncertain how much it will cost. The analysis and 30 country case-studies provide important evidence and hard analysis to fill the gap between over-simple estimates of costs and over-cautious pessimism on policies.' Sir Richard Jolly, former architect of the Human Development Report 'This book is the blueprint for eradicating world poverty in the 21st century. Forget Stiglitz, move on from Sachs: this book based on over a decade of committed work in UNDP and UNICEF marks the real turning point away from neo-liberalism in the global discourse about economic and social policy.' Bob Deacon, Professor of International Social Policy, Director of Globalism and Social Policy Programme, Sheffield University, UK 'This is an excellent, timely book...Innovative, clearly written, readable and draws on a comprehensive range of research.' Dr David Lewis, Reader in Social Policy, London School of Economics

Table of Contents

Section Title Page Action Price
Cover cover
About this book i
About the authors ii
About CROP iii
Table of contents vii
List of tables and figures x
Foreword xiii
Preface xv
1. Introduction 1
Annex 1.1 The scale of human poverty 8
Annex 1.2 Millennium Development Goals and targets 10
Part I Macroeconomic policies 11
2. Integrating macroeconomic and social policies to trigger synergies 13
2.1 The theoretical foundations of mainstream macroeconomic policies: a critique 16
2.2 An alternative approach 31
2.3 The industrialized countries in historical perspective 40
2.4 Concluding remarks 55
3. Macroeconomic policies and institutions for pro-poor growth 57
3.1 Redistribution to reduce income poverty and manage distributional conflict 61
3.2 Industrial policy for technological/structural change 68
3.3 Alternative macroeconomic policies 81
3.4 The historical significance of the current conjuncture in the macroeconomic policy debate 87
Part II Public expenditure on basic social services\r 95
4. The (in)adequacy of public spending on basic social services 97
4.1 Neoclassical basis for state financing of basic services 97
4.2 The synergy among social services 102
4.3 Public expenditure on basic social services in developing countries 113
4.4 Concluding remarks 132
5. The distribution of benefits of health and education spending 134
5.1 Disparities in health and education outcomes 134
5.2 The distribution of benefits of public spending on education 137
5.3 Distribution of the benefits of public spending on health 142
5.4 Explaining the incidence of benefits of health and education expenditure 148
5.5 Conclusion 151
6. Policies to enhance efficiency and improve delivery in the public provision of basic social services 154
6.1 Allocative efficiency 156
6.2 Technical efficiency 173
6.3 Conclusion 208
Annex 6.1 Trend of BSS share in total public expenditure, selected countries 209
7. Governance reforms to address the systemic problems of state provision of basic services 211
7.1 The nature of the state as a factor in state failure in service delivery 211
7.2 Capabilities, democracy and decentralization 215
7.3 Case studies 220
7.4 Summing up 233
8. Promoting complementarity between public and private provision 235
8.1 Why has private provision increased? 236
8.2 Education 238
8.3 Health 247
8.4 Water and sanitation 258
8.5 The private sector – full speed ahead? 270
8.6 Conclusions 271
Part III Mobilizing domestic and external resources 275
9. Taxation and mobilization of additional resources for public social services 277
9.1 Intra-sectoral reallocation of public spending 280
9.2 Inter-sectoral restructuring of public spending 287
9.3 Enhancing revenues 299
9.4 Earmarking of funds (or hypothecated taxes) 307
9.5 Public expenditure effectiveness and performance budgeting 310
9.6 Concluding remarks 314
Annex 9.1 International taxation and other potential international sources of development finance 315
10. The consistency between aid and trade policies and the Millennium Goals 319
10.1 Aid policies and poverty reduction 321
10.2 ODA for basic social services: the quantitative evidence 322
10.3 Aid to basic education, basic health and water and sanitation: some qualitative issues 332
10.4 Modality of aid to basic services – whither the sectoral approach? 337
10.5 Improving the consistency of donor government policies 342
10.6 Concluding remarks 349
11. Conclusion 358
Notes 369
chapter 1 369
chapter 2 370
chapter 3 373
chapter 4 375
chapter 5 377
chapter 6 379
chapter 7 383
chapter 8 384
chapter 9 387
chapter 10 391
chapter 11 394
References 395
Index 426