Waste Not, Want Not: Understanding the Efficiency of Health Expenditure

• Author: Francesco Grigoli - Javier Kapsoli
• Pages: 1-4

IMF

Volume 15, Number 1 March 2014

www.imf.org/researchbulletin

B U L L E T I N

1

Dismal Employment Growth in EU Countries:

The Role of Corporate Balance Sheet Repair

and Dual Labor Markets

Bas B. Bakker and Li Zeng

Large differences among European Union coun-

tries in postcrisis employment growth to a large

extent were driven by the need to adjust corpo-

rate balance sheets, which had greatly deterio-

rated during the boom years in some countries

but not in others. To close the large gaps between saving and investment, firms reduced

investment and cut costs to boost profits. With much of the cost adjustment falling on

firms’ wage bills, employment losses were largest in countries under the most intense

pressures to improve corporate profitability and with limited wage flexibility due to

labor market duality.

Since the onset of the globa l nancial crisis, there have been st riking dierences

in labor market developments among European Union (EU) countr ies. Between

2008 and 2011, employment dropped by 14 percent in Ireland, but increased by

Waste Not, Want Not: Understanding the

Efficiency of Health Expenditure

Francesco Grigoli and Javier Kapsoli

Public health spending is low in emerging and

developing economies relative to advanced

economies, and health outputs and outcomes

need to be substantially improved. Simply

increasing public expenditure in the health

sector, however, may not significantly affect

health outcomes if the efficiency of this spending is low. In a recent paper, we

quantify the potential gains in life expectancy from reducing the inefficiency of

public health expenditure compared with improvements in other determinants of

health, such as increasing public spending in health, raising education outcomes,

and reducing tuberculosis and HIV diffusion. The results suggest that African

economies have the lowest efficiency of public health spending. At current spend-

ing levels, they could boost life expectancy up to about five years if they followed

best practices; by comparison, a 10 percent increase in public health spending per

capita would raise life expectancy by only two months.

(continued on page 5)

In This Issue

1 Waste Not, Want Not:

Understanding the

Efciency of Health

Expenditure

1 Dismal Employment

Growth in EU Countries:

The Role of Corporate

Balance Sheet Repair and

Dual Labor Markets

8 Recommended Readings

from the IMF Bookstore

9 Q& A: Seven Questions on

Financial Interconnectedness

12 IMF Working Pape rs

15 Staff Discussion Notes

15 IMF Econom ic Review

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Research Summaries