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Washington, D.C., World Bank, 1990. 49 p. (World Bank Discussion Papers No. 71)Little is known about the overall impact of adjustment programs on poverty. To a large extent, this is because it is difficult to distinguish the effects of externally induced recession from the effects of the policies and programs designed to offset them. Nevertheless, one clear lesson from experience has been that an orderly adjustment process designed to establish a new equilibrium growth path is indispensable for improving the longer-term position of the poor. Some adjustment measures can affect the poor adversely. This adverse impact may result from reductions in public expenditures, increases in prices of goods and services consumed by the poor, and declines in employment or real wages in sectors in which they work. Appropriate social and economic measures can help to reduce the adverse impact on the poor and create opportunities for stronger poverty reduction in the future. The most common way of addressing the adverse impact of adjustment has been the implementation of targeted compensatory programs. Such programs can compensate those affected directly by adjustment (for example laid-off public sector employees) or provide temporary employment of relief to the chronically poor. But these programs have often been too complex and have faced serious shortcomings such as insufficient political commitment, institutional weaknesses, shortages of funding and poorly trained staff. Greater attention should be given in the future to identifying the most appropriate interventions as well as to their design and implementation. Changes in the design of adjustment programs can promote the longer-run interests of the poor, but have received relatively little attention. Appropriate design changes can help to foster pro-poor growth by, for example, removing biases that favor capital-intensive production or other impediments to employment growth. They can also enable reallocations of public expenditures in ways that support, or improve the efficiency of, programs that help the poor to take advantage of the emerging economic opportunities (by developing skills or providing the necessary complementary infrastructure). Finally, appropriate design changes can help mitigate the possible adverse impact on the poor, for example, by targeting subsidies more effectively. Subsidies that have a large impact on the income of the poor (even if only a small proportion of the subsidy reaches them), should not be reduced or eliminated unless alternative means of reaching the poor are introduced. (author's)
PAHO Bulletin. 1988; 22(4):416-29.This article, which is a summary of a World Bank policy study, states that the characteristics and performance of health sectors vary tremendously in developing countries. In most cases, the sector faces three main problems: insufficient spending on cost-effective health activities; internal inefficiency of public programs; and inequity in the distribution of benefits from health services. It is argued that each of these problems is due in part to the efforts of governments to cover the full costs of health care for everyone from general public revenues. Proposed policy reforms include: charge users of government health facilities; provide insurance or other risk coverage; use nongovernmental resources effectively; and decentralize government health services. However, it was pointed out that further analysis is needed on these proposed reforms.