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World Development Report 2004: Making Services Work for Poor People World Bank
World Development Report 2004: Making Services Work for Poor People

Book Description
Broad improvements in human welfare will not occur unless poor people receive wider access to affordable, better quality services in health, education, water, sanitation, and electricity. Without such improvements in services, freedom from illness and freedom from illiteracy - two of the most important ways poor people can escape poverty - will remain elusive to many.

The World Development Report 2004: Making Services Work for Poor People says that too often, key services fail poor people - in access, in quantity, in quality. This imperils a set of development targets known as the Millennium Development Goals (MDGs) which call for a halving of the global incidence of poverty, and broad improvements in human development by 2015.

The report provides powerful examples of where services do work, showing how governments and citizens can do better. There have been spectacular successes and miserable failures in the efforts by developing countries to make services work. The main difference between success and failure is the degree to which poor people themselves are involved in determining the quality and the quantity of the services which they receive.

"Too often, services fail poor people. These failures may be less spectacular than financial crises, but their effects are continuing and deep nonetheless," says World Bank President, James D. Wolfensohn. "Services work when they include all people, when girls are encouraged to go to school, when pupils and parents participate in the schooling process, when communities take charge of their own sanitation. They work when we take a comprehensive view of development - recognizing that a mother’s education will help her baby’s health, that building a road or a bridge will enable children to go to school."

The report comes at a time when rich countries have pledged to increase foreign aid, and poor countries have pledged to improve their policies and institutions, to try to reach the MDGs. "To accelerate progress in human development, economic growth is of course necessary, but it is not enough," says World Bank Chief Economist and Senior Vice-President for Development Economics, Nicholas Stern. "Mobilizing to reach the 2015 development goals will require both a substantial increase in external resources and more effective use of all resources, internal and external. The report offers a practical framework for using resources more effectively."

"Improving the delivery of key services such as healthcare and education to poor people is critical to accelerate progress in human development, because more public spending by itself will not do it," says Jean-Louis Sarbib, the World Bank’s new Senior Vice-President for Human Development, and former Vice President for the Middle East and North Africa Region of the World. "The Middle East and North Africa (MENA) region spends more on public education than any other developing region, and yet it has some of the highest rates of youth illiteracy in the world. A girl in MENA is as likely to be illiterate as a girl in Sub-Saharan Africa, which is a much poorer region."

Services can work for poor people

The report points to several success stories. Indonesia used its oil windfalls to build new schools and hire more teachers, doubling primary enrollment to 90 percent by 1986. The number of children enrolled in primary schools in Uganda increased from 3.6 million to 6.9 million in five years. A program in Mexico that gives cash to poor households if they visited a clinic regularly and their children attended school reduced illness among children by 20 percent, and increased secondary enrollment by 5 percentage points for boys and 8 for girls.

"Services can work when poor people stand at the center of service provision - when they can avoid poor providers, while rewarding good providers with their clientele, and when their voices are heard by politicians - that is, when service providers have incentives to serve the poor," says Shanta Devarajan, Director of the World Development Report 2004 , and Chief Economist of the World Bank’s Human Development Network.

The report documents three ways in which services can be improved:

1. By increasing poor clients’ choice and participation in service delivery, so they can monitor and discipline providers. School voucher schemes - such as a program for poor families in Colombia, or a girls’ scholarship program in Bangladesh (that paid schools based on the number of girls they enrolled) - increase clients’ power over providers, and substantially increased enrollment rates. Community-managed schools in El Salvador, where parents visited schools regularly, lowered teacher absenteeism and raised student test scores.

2. By raising poor citizens’ voice, through the ballot box and making information widely available. Service delivery surveys in Bangalore, India, that showed poor people the quality of the water, health, education and transport services they were receiving compared to neighboring districts, increased demand for better public services, and forced politicians to act.

3. By rewarding the effective and penalizing the ineffective delivery of services to poor people. In the aftermath of a civil war, Cambodia paid primary health providers in two districts based on the health of the households (as measured by independent surveys) in their district. Health indicators, as well as use by the poor, in those districts improved relative to other districts.

Public services versus private - a false argument ?

Providing communities with healthcare, education, and other services has been a contentious issue in many countries, with government services pitted against large-scale privatization.

The report says that while there are frequent problems with public services, it would be wrong to conclude that government should give up and leave everything to the private sector. If individuals are left to their own devices, they will not provide levels of education and health that they collectively want. Not only is this true in theory, but in practice no country has achieved significant improvement in child mortality and primary education without government involvement.

Furthermore, private-sector participation in health, education, and infrastructure is not without problems - especially in reaching poor people. The extreme position that the private sector should do everything is clearly not desirable either.

"Instead of getting caught up in the public versus private services argument, the only issue that really matters is whether the mechanism that delivers key services strengthens poor people’s ability to monitor and discipline providers, raises their voice in policymaking, and gets them the effective services they need for their families," says Ritva Reinikka, the Co-Director of WDR 2004, and Research Manager for Public Services at the World Bank.

The report says that some aid donors take a variant of the "leave-everything-to-the-private sector" position. If government services are performing so badly, donors may ask, why give more aid to those governments?

When policies and institutions are improving, the report argues, aid should increase, not decrease, to realize the mutually-shared objective of poverty alleviation, such as the Millennium Development Goals. At the same time, simply increasing public spending - without seeking improvements in the efficiency of that spending - is unlikely to reap substantial benefits. The productivity of public spending varies enormously across countries. Ethiopia and Malawi spend roughly the same amount per person on primary education - with very different outcomes. Peru and Thailand spend vastly different amounts - with similar outcomes.

The book is available for purchase from the World Bank Online Book Shop . The price is $26.

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