Intergovernmental fiscal relations and poverty alleviation in Viet Nam

A successful poverty alleviation strategy has four distinct elements: 1) identifying who the poor are, where they are located, and what they do; 2) analyzing why they are poor; 3) developing policies to improve their standards of living; and 4) supplementing income-improving policies with direct"safety net"policies to increase the poor's short-term consumption etitlements. The precise mixture of"capacity-improving"investments and"safety net"policies appropriate for any country will depend on the country's income level, the extent and nature of its poverty problem, and many other factors. The strategy chosen must be implemented effectively. Spending and revenue decisions need to be more decentralized to ensure that the poverty alleviation policies adopted reflect the preferences, needs, and fiscal abilities of different regions of the country. The nature of that decentralization depends on the country. Pro-poor services throughout Viet Nam are underfunded. This problem is particularly acute in the poorer areas. Improvements in the system of intergovernmental finances could help ensure that each level of government, even in the poorer provinces, is adequately funded - and provided with sufficient expenditure and revenue raising autonomy - to support local investments and their operation and maintenance. Since poor provinces are less able to mobilize additional local revenues to support services, well-designed intergovernmental transfers are particularly important. Provinces must play a greater role both in raising revenues and in allocating expenditures, with incentives built in to ensure that they do so responsibly and efficiently. Local governments must - if they are tobe held accountable for their actions - have some responsibility for determining local tax rates. This will allow them to vary rates to collect more revenues to finance higher levels of public services if they so choose, and at the same time allow the central government to design its transfers in such a way as to ensure that local fiscal efforts are not discouraged by the receipt of such transfers. Richer provinces will tend to collect greater revenues. When transfers are needed to finance local spending in poorer areas, they should provide incentives for local revenue mobilization and allow for some degree of equalization. Services deemed of national importance (for example, a minimum level of education, health care, and social relief) can be promoted by designing specific-purpose transfers. These services must be identified and varying matching requirements established for different provinces depending on such factors as their own revenue base and the cost of providing services in that province.Municipal Financial Management,Public Sector Economics&Finance,Environmental Economics&Policies,Banks&Banking Reform,Decentralization,National Governance,Environmental Economics&Policies,Public Sector Economics&Finance,Health Economics&Finance,Banks&Banking Reform

DECENTRALIZATION IN UGANDA

The theory of fiscal federalism provides several reasons to expect better public service delivery if government is decentralized. Demand for public services is expected to vary across jurisdictions, and local government officials are expected to match supply of public services with demand more effectively than if public services were centrally provided. Households are expected to have higher participation rates in elections and to vote for better reasons (the candidates' experience, agenda or political affiliation, rather than bribery or the candidates' race, religion etc.) at the local level, and to have better access to information about local affairs than about national politics. Finally, mobility across jurisdictions is expected to induce local governments to be more efficient. We review the decentralization process in Uganda and provide evidence on all these mechanisms. There turns out to be little support for the relevance of these hypotheses to Uganda

Provision of Health Care and Education in Transitional Asia: Key Issues and Lessons from Vietnam

This paper examines the impact of the transition to a market economy on health and education outcomes in transitional Asia, with particular focus on the case of Vietnam. After examining a variety of empirical evidence, several lessons emerge. First, protecting and improving health and education outcomes depends heavily on the success of economic reforms in generating income growth; strong economic growth generally increases outcomes. Second, the nature of the economy before the reforms has an important role in determining their overall impact. Third, small-scale experimentation of specific policies should be done before implementing them on a larger scale. Fourth, governments need to develop medium- to long-term plans for blending public and private provision of health and education services. Finally, because some groups will inevitably face serious problems, identifying and protecting vulnerable groups is an important task of the government after the reforms

User fees plus quality equals improved access to health care: Results of a field experiment in Cameroon

Since the Bamako Initiative was launched in 1988, many African countries have embarked on comprehensive primary health care programs relying, at least partially, on revenues generated through user fees to revitalize health care delivery systems. Although these programs contain two critical components, user fees and improved quality, policy debates have tended to focus on the former and disregarded the latter. The purpose of this study is to provide a net assessment of these two components by testing how user fees and improved quality affect health facility utilization among the overall population and specifically among the poorest people. A "pretest-posttest controlled" experiment was conducted in five public health facilities in the Adamaoua province of Cameroon. Three health centers which were to introduce a user fee and quality improvement (i.e. reliable drug supply) policy were selected as "treatment" centers and two comparable facilities not yet phased into this policy were selected as "controls". Two rounds of household surveys were conducted (each to 800 households in 25 villages surrounding the five study sites) to measure the percentage of ill people seeking care at the health center before and after the implementation of the policy. The experiment was tightly controlled by conducting monthly observations at each study site. Results indicate that the probability of using the health center increased significantly for people in the "treatment" areas compared to those in the "control" areas. Travel and time costs involved in seeking alternative sources of care are high; when good quality drugs became available at the local health center, the fee charged for care and treatment represented an effective reduction in the price of care and thus utilization rose. Moreover, contrary to previous studies which have found that the poorest quintile is most hurt by user fees, this study found that probability of the poorest quintile seeking care increases at a rate proportionately greater than the rest of the population. Since the poor are most responsive to price changes, they appear to be benefitting from local availability of drugs more than others.user fees health financing access experiment

How Important is the Capacity of Local Governments for Improvements in Welfare? Evidence from Decentralised Uganda

Decentralisation is often claimed to be effective for improvements in welfare and hence the reduction of poverty but empirical evidence is scarce. This paper seeks to gain further insights into the relationship between decentralisation and welfare by investigating the role of local governments' capacity for household consumption and school enrolment in Uganda. Using household survey data, it finds suggestive evidence that both household consumption and school enrolment are positively related with the level of capacity of district governments.