Richard M. Bird, Jennie I. Litvack, M. Govinda Rao
A successful poverty alleviation strategy has four distinct elements: 1) identifying who the poor are, where they are located, and what they do; 2) analyzing why they are poor; 3) developing policies to improve their standards of living; and 4) supplementing income-improving policies with direct"safety net"policies to increase the poor's short-term consumption etitlements. The precise mixture of"capacity-improving"investments and"safety net"policies appropriate for any country will depend on the country's income level, the extent and nature of its poverty problem, and many other factors. The strategy chosen must be implemented effectively. Spending and revenue decisions need to be more decentralized to ensure that the poverty alleviation policies adopted reflect the preferences, needs, and fiscal abilities of different regions of the country. The nature of that decentralization depends on the country. Pro-poor services throughout Viet Nam are underfunded. This problem is particularly acute in the poorer areas. Improvements in the system of intergovernmental finances could help ensure that each level of government, even in the poorer provinces, is adequately funded - and provided with sufficient expenditure and revenue raising autonomy - to support local investments and their operation and maintenance. Since poor provinces are less able to mobilize additional local revenues to support services, well-designed intergovernmental transfers are particularly important. Provinces must play a greater role both in raising revenues and in allocating expenditures, with incentives built in to ensure that they do so responsibly and efficiently. Local governments must - if they are tobe held accountable for their actions - have some responsibility for determining local tax rates. This will allow them to vary rates to collect more revenues to finance higher levels of public services if they so choose, and at the same time allow the central government to design its transfers in such a way as to ensure that local fiscal efforts are not discouraged by the receipt of such transfers. Richer provinces will tend to collect greater revenues. When transfers are needed to finance local spending in poorer areas, they should provide incentives for local revenue mobilization and allow for some degree of equalization. Services deemed of national importance (for example, a minimum level of education, health care, and social relief) can be promoted by designing specific-purpose transfers. These services must be identified and varying matching requirements established for different provinces depending on such factors as their own revenue base and the cost of providing services in that province.
The article first proposes a framework within which to assess the potential of health sector reforms in Latin America for primary health care (PHC). Two dimensions are recognized: the scope of the reforms, content, and the means of participation that are put into play. This framework is then complemented through a critique of the often-sought but little-analyzed PHC reform strategies of decentralization and health sector integration. The analytical framework is next directed to the financing of health services, a chief aspect of any reform aiming toward PHC. Two facets of health service finance are first distinguished: its formal aspect as a means for economic subsistence and growth, and its substantive aspect as a means to promote the rational use of services and thus improvement of health. Once finance is understood in this microeconomic perspective, the focus shifts to the analysis of health care reforms at the macro, health policy level. The article concludes by positing that PHC is in essence a new health care paradigm, oriented by the values of universality, redistribution, integration, plurality, quality, and efficiency.
The formulation of the argument for distributional equality by William Breit and William Culbertson is an improvement on that of The Economics of Control and is more effective in class. Their generalization of the to the case of increasing marginal utility (of income) offset by a greater degree of diminishing marginal utility elsewhere, is also an improvement. Their point that Paul Samuelson did not escape the ''equal ignorance assumption is well taken. Ambiguity, being a case of lack of clarity is a charge that can never successfully be refuted. However, I would like to deny a switching of conclusions. Perhaps the ambiguity would have been avoided if I had added the following words in Roman type to the italicized sentence quoted: . . if it is desired to maximize the total satisfaction in a society, the rational procedure, in the absence of the knowledge that would enable us to equalize the marginal utilities, is to maximize the probable total satisfaction-i.e., to divide income on an equlitarian basis. The theorem on page 32 is not than the and mild one of page 29. It is the same proposition. The ingenous device of the 100 million coconut islands in one way does more than is claimed for it and in another way, does less. If it were possible to divide the total population into pairs which had the same utility functions, the equalization of income within each pair would never involve a wrong movement to be offset by a right oine. That is why there is certainty of improvement from equalization on every island. Furthermore, there would be an absolute maximization, with certainty, of the total satisfaction of the pair on each island from their joint income. On the other hand, the parable assumes that the combined incomes of the pairs have somehow already been equalized; that for every individual in the half of the total population with incomes less than the mean, his partner in the other half of the population (with an identical utility function) has an income greater than the mean by the exact amount that his is less than the mean. (This implies incidentally that no individual has an income as as twice the mean unless his partner has a zero income.) If this is not the case, some islands will be richer than others. We will then have to equalize the incomes of the islands before we could conduct Breit and Culbertson's experiment. The parable, therefore, while not necessary for the meek that income equalization maximizes the probable total satisfaction, is not sufficient for the bold proposition (to which I have never subscribed) that income equalization increases total satisfaction with absolute certainty. Breit and Culbertson's development of their parable reflects the same discomfort they have seen in others. The pair on the island are not satisfied with the proof that the equalization of the incomes has maximized their probable satisfaction. Sharing a widespread human craving for certainty, they want to be quite sure that they have at least increased their actual total satisfactions. This assurance is unfortunately not available as long as the utility functions are unknown. Breit and Culbertson also are seeking for a certainty of gain in a much bolder and more interesting regarding realized satisfactions instead of the maximization of a mere probability, and are accurately represented by the island pair they have invented. They have imagined a certainty of gain only by imagining the discovery of identicalutility twins. But the whole point of the * University of California, Berkeley.