Financial Times

Put poor in charge of key services
By Nicholas Stern and Shantayanan Devarajan
Thanks mainly to rapid economic growth in China and India, the world as a whole will halve by 2015 the proportion of people who were living on less than $1 a day in 1990.

As welcome as this growth is, it is unlikely to achieve the rest of the international development targets known as the Millennium Development Goals, which include calls for every boy and every girl to complete primary school, as well as to reduce by two-thirds the number of children who die before their fifth birthday, both by 2015.

In Africa, where growth has been minuscule, the success in reducing poverty in all its painful forms, remains elusive. Accelerating progress toward the health and education goals will require rapid economic growth, a substantial increase in foreign aid, and more effective use of all resources, internal and external. These are mutually reinforcing. Success will depend on achieving all three at the same time.
More effective use of resources means improvements in the delivery of key services that contribute to better health and education results for people and services such as water, sanitation, energy, transport, health care, and education.

Too often, these services are failing poor people. Governments spend very little of their budgets on the services that poor people need to improve their health and education. In Guinea, 48 percent of public health spending benefits the richest fifth of the population; only 8 percent is enjoyed by the poorest fifth. Even when public spending can be devoted to the poor, say, by shifting resources to primary schools and clinics, the money does not always reach frontline service providers.

In the early 1990s in Uganda, only 13 percent of non-salary spending on primary education actually reached the primary schools; the rest was diverted or stolen. Even increasing the share of spending that reaches poor schools as Uganda has done is not enough.

For education results to improve, teachers must show up at work and do their jobs well, just as doctors and nurses must do for people's health to improve. But these service providers are often trapped in a system where incentives for doing their jobs well are weak, corruption is rife, and political patronage is a way of life.

A survey of primary health care clinics in Bangladesh found the absenteeism rate for doctors to be 74 percent. Services are failing poor people because poor people have had little say in how their key services are provided. As patients in clinics, students in schools, travellers on buses, consumers of water, poor people are clients.

They have a relationship with the schoolteachers, doctors, bus drivers, and water companies who are their frontline providers. Poor people have a similar relationship when they buy something in the market. In a competitive-market transaction, they get the service because they pay the provider directly. If they are unhappy, they have power over the provider, they can refuse to do business with him or her again.

For services such as health, education, water, electricity, and sanitation, however, society has decided that these particular services will not be provided through market transactions because they are a public responsibility, for reasons of market failures, and the fact that many of these services are rights to which people are entitled and should have the ability to assert.

So these services are provided through the so-called "long route" of accountability, by citizens influencing policymakers and policymakers influencing providers. When the relationships along this long route break down, services fail (absentee teachers, leaking water pipes), and human development suffers.

Consider the first of the two relationships along the long route, the link between poor people and policymakers or politicians. Poor people are citizens. In principle, they contribute to defining society's collective objectives.

In practice, this does not always work. Free public services and "no-show" jobs are handed out as political patronage, with poor people rarely the beneficiaries. However, when poor people are better informed about the quality of services, they put pressure on politicians to deliver.

In Uganda, when the newspapers reported that primary schools were receiving only 13 percent of the budget that had been earmarked for them in the capital, the public started demanding that the entire school budget be posted on the local schoolroom door. The share of non-salary budgets going to primary schools has since increased to 80 percent.

Even if poor people can reach their policymakers, services will not automatically improve unless policymakers ensure that service providers really do deliver. In the aftermath of a civil war, Cambodia paid primary health providers in two districts based on improvements in the health of households (as measured by independent surveys) in their district. Health results, including access to poor people, increased noticeably in those districts compared to others.

But policymakers may not always be able to monitor whether a service has been provided, much less impose penalties for underperformance. A problem like teacher and health worker absenteeism is often the result. Given the weaknesses in the long route of accountability, service outcomes can be improved by strengthening the short route, by increasing the client's power over providers.

When providers are valued and motivated, they perform better and human development improves. El Salvador's Educo programme gives parents' associations the right to hire and fire teachers, and requires them to visit the schools monthly.
Participation by the clients reduced teacher and student absenteeism and improved student performance.No single solution fits all services in all countries.

But they all have to do with putting poor people at the centre of service provision by enabling them to monitor and encourage, and if necessary, discipline providers, by raising their voice in policymaking and by giving providers incentives to serve the poor.

In Monterrey, Mexico in 2002, the global community made a commitment to the world's poor people that it would make the best effort possible to help them reduce poverty in all its injurious ways.

That effort includes more flexible foreign aid from rich countries, and reforms in developing countries to make these and other resources more effective. Service reforms that put poor people at the centre will quicken progress towards the Millennium Development Goals. The time to act is now.

Nicholas Stern is Chief Economist of the World Bank; Shantayanan Devarajan is the Director of the World Development Report 2004, and Chief Economist Designate of the World Bank's Human Development Network.

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