Latest Data: Education and Health Spending Continues Rise In Countries with IMF-Supported Programs
| Author | Sanjeev Gupta, Marijn Verhoeven/Gustavo Yamada/Erwin Tiongson |
| Position | IMF Fiscal Affairs Department |
| Pages | 79-80 |
Page 79
The most recent review of data on government expenditure on education and health care in countries with IMF-supported programs (see IMF Survey, July 21, 1997, and February 23, 1998, for previous assessments) shows that such spending has continued to increase in the course of the programs. There has also been steady progress with indicators of education attainment and health status under IMF-supported programs. But the latest study, prepared by the Fiscal Affairs Department in collaboration with other IMF departments, also indicates that substantial scope exists for improving the allocation of public resources within the education and health sectors to obtain better social outcomes. This would accelerate social development and promote long-term economic growth. The current study covers 145 developing and transition countries, including 65 countries with IMF-supported programs during 1986-97, and is part of an ongoing effort to compile and analyze data on government spending in the education and health sectors. For 109 countries, the data refer to the central government; for 2 countries, they comprise the entire public sector; and other observations are mostly for the general government.
In 65 countries supported by various types of IMF programs, average government spending on education and health care has increased since the year preceding the program-a period of eight years on average-by 2Vi percent a year in real per capita terms (chart, upper right). Education and health expenditure also increased as a percentage of GDP. This progress with social spending occurred against a background of fiscal adjustment and was typically accomplished through a reorientation of budget allocations. Compared with countries without IMF-supported programs since 1986, program countries had lower education spending as a percentage of GDP (chart, lower right).
Rising social spending in program countries has been accompanied, on average, by improvements in social indicators, although these indicators are influenced by many other factors, such as general economic conditions and the activities of nongovernmental organizations and other private sector providers of social services (upper chart, page 80).
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