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New York, New York, Population Council, Center for Poplicy Studies, 1985 Aug. 42 p. (Center for Policy Studies Working Papers No. 113)This analysis of family planning program funding suggests that current funding levels may be inadequate to meet projected contraceptive and demographic goals. Expenditures on organized family planning in less developed countries (excluding China) totaled about US$1 billion in 1982--about $2/year/married woman of reproductive age. Cross-sectional analysis indicates that foreign support as a proportion of total expenditures decreases with program duration. Donor support to family planning in less developed countries has generally declined from levels in the late 1970s. This is attributable both to positive factors such as program success and increased domestic government support as well as requirements for better management of funds and the worldwide economic recession. Foreign assistance seems to have a catalytic effect on contraceptive use only when the absorptive capacity of family planning programs--their ability to make productive use of resources--is favorable. The lower the stage of economic development, the less visible is the impact of contraceptive use or fertility per investment dollar. On the other hand, resources that do not immediately yield returns in contraceptive use may be laying the foundation for later gains, making increased funding of family planning programs an economically justifiable investment. The World Bank has estimated that an additional US$1 billion in public spending would be required to fulfill the unmet need for contraception. To increase the contraceptive prevalence rate in developing countries to 58% (to achieve a total fertility rate of 3.3 children) in the year 2000 would require a public expenditure on population programs of US$5.6 billion, or an increase in real terms of 5%/year. Improved donor-host relations and coordination are important requirements for enhancing absorptive capacity and program performance. A growing willingness on the part of donors to allow countries to specify and run population projects has been noted.