Publication:
Cyclical Patterns in Government Health Expenditures between 1995 and 2010 : Are Countries Graduating from the Procyclical Trap or Falling Back?

Loading...
Thumbnail Image
Files in English
English PDF (3.56 MB)
645 downloads
English Text (377.78 KB)
104 downloads
Published
2014-04
ISSN
Date
2014-06-12
Editor(s)
Abstract
The 2008-09 global economic crises have shown that no country is immune to external challenges. When policy controls are missing or not used efficiently, crises can reverse progress even in advanced economies. This unexpected outcome has increased concerns about the ability of governments in developing countries to manage downturns. The question is whether current and future crises will reinforce the procyclical responses or whether these governments will be able to escape the procyclical trap. In the fiscal domain, countercyclical trends in developing countries are promising. Over the last decade, about a third of the developing world has been able to escape the procyclicality trap. Yet, little is known about the evidence on the cyclical patterns of government health spending. This descriptive analysis, which covers 183 countries between 1995 and 2010, provides empirical evidence on the cyclicality of government health expenditures, using panel data from a global macro database, the fiscal health database. The objective is to propose user-friendly diagnostic approaches in this area that can be easily replicated and updated to inform technical discussions and policy making.
Link to Data Set
Citation
Velenyi, Edit V.; Smitz, Marc F.. 2014. Cyclical Patterns in Government Health Expenditures between 1995 and 2010 : Are Countries Graduating from the Procyclical Trap or Falling Back?. Health, Nutrition, and Population (HNP) discussion paper;. © http://hdl.handle.net/10986/18643 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Other publications in this report series
Journal
Journal Volume
Journal Issue

Related items

Showing items related by metadata.

  • Publication
    The Jobs Crisis : Household and Government Responses to the Great Recession in Eastern Europe and Central Asia
    (World Bank, 2011-03-29) World Bank
    The financial crisis swiftly expanded into an economic crisis throughout America and Western Europe, from where it spread to developing countries that had depended on foreign direct investment, consumer and mortgage credit, trade, and remittances. By early 2009, it was clear that this economic downturn would be more severe than any crisis since the great depression, prompting some to it as the 'great recession.' Eastern European and Central Asian countries were hit particularly hard during 2009, global Gross Domestic Product (GDP) contracted for the first time since Second World War. The financial crisis and the ensuing economic downturn, the worst since the Great Depression in the 1930s, went hand in hand with tightening of credit markets, bank failures, firm closures, and high demand for social safety nets. This report, The jobs crisis: household and Government responses to the great recession in Eastern Europe and Central Asia, brings together evidence that World Bank teams have collected on the impact of the crisis on households and families in Eastern Europe and Central Asia. This report shows how the crisis was felt by Eastern European and Central Asian households. Not only did unemployment rise sharply but it also lasted longer. The report also shows that the pain of the recession was broader, with workers taking home smaller paychecks as firms offered lower wage rates and fewer hours of work to their workers. The jobs crisis finds that households used a variety of ways to cope with the crisis. The jobs crisis presents an account of how governments reacted to the crisis through social policy reforms and initiatives and how such responses could be improved in the future. Unemployment insurance benefits played a particularly important cushioning role, but coverage of the unemployed tended to be limited.
  • Publication
    Fiscal Rules and the Pro-Cycylicality of Public Investment in the West African Economic and Monetary Union
    (World Bank, Washington, DC, 2013-08) Dessus, Sébastien; Diaz Sanchez, Jose Luis; Varoudakis, Aristomene
    Evidence from a large panel of low-income and lower middle-income countries over the period 1995–2012 suggests that, contrary to other countries, public investment in the West African Economic and Monetary Union (WAEMU) has been pro-cyclical. Public investment contracts more in “bad times” than it increases in “good times” and appears to have become pro-cyclical since the introduction of the fiscal convergence criteria in 1994. The pro-cyclicality of public expenditure and the high asymmetry of shocks that affect WAEMU countries justify exploring options for greater counter-cyclicality of rules-based fiscal frameworks and for risk-sharing.
  • Publication
    Fiscal Adjustment and Growth in Sub-Saharan Africa : Overview and Lessons from the Current Downturn
    (2010-05-01) Fofack, Hippolyte
    In light of the proliferation of exceptionally large fiscal stimuli to ward off the recession triggered by the 2008 global economic and financial crisis in most advanced economies, this paper revisits the fiscal adjustment and growth nexus in Sub-Saharan Africa. Using transfer functions, it quantifies expected losses in terms of aggregate output largely attributed to a systematic implementation of pro-cyclical expenditure switching and reducing policies to achieve low deficit targets throughout the decades of adjustments. The results consistently highlight a much higher predicted aggregate output under the hypothesized counter-cyclical fiscal expansion option. This consistent outcome suggests that the output gap would have been significantly smaller in the region if countries had drawn on stop-and-go policies of fiscal expansion to sustainably raise the stock of capital investments.
  • Publication
    Towards 2015 : Spending for Indonesia's Development, Shaping the Prospects of a Middle-Income Country
    (Washington, DC, 2009-08) World Bank
    This report discusses the future of Indonesia's public expenditures as it enters the 21st century. It contributes to the discussion on Indonesia's spending priorities for the years ahead. These choices will impact the lives of Indonesians, and their opportunities to grow richer and receive better services. The report will contribute to Indonesia s next five-year plan, the RPJM, which will take effect in January 2010. Indonesia has been one of the most successful countries in reducing its debt-to-GDP ratio. Since 1999, when debt levels reached over 90 percent of GDP, Indonesia has reduced its debt levels to just above 30 percent of GDP by the end of 2008. Education spending increased from 11 percent of total government spending in 2001 to 15 percent in 2008. Chapter 1 discusses public spending from 2001 to 2009, including discretionary spending, key sectors, subsidies and decentralization. Chapter 2 analyzes Indonesia's economy in the current (2009) economic downturn. Indonesia is in a position of relative economic strength despite the impact of the global financial crisis. This is largely thanks to its broad-based growth that has avoided over-reliance on exports. The share of output that Indonesia exports is the smallest of the major Southeast Asian economies. Chapter 3 presents the future of Indonesia's fiscal growth to 2015. Notwithstanding noteworthy achievements over the past decade, Indonesia continues to face significant economic and social challenges, and major gaps remain in many areas of public expenditure. However, sustained fiscal consolidation and governance reforms, as well as resilience in the face of the global crisis, leave Indonesia well placed to push forward with sustained poverty reduction. Strategic use of public resources and continued growth could see swift improvement in economic and social outcomes over the coming five years.
  • Publication
    Poland - Public Expenditure Review : Analysis of Social Sectors and Public Wages
    (World Bank, 2010-03-08) World Bank
    This report looks at public spending on pensions, education, health, social assistance, labor market programs, and public wages. Presenting the findings of a series of studies and notes compiled sice April 2009, it highlights how reforming such spending, which comprises about one quarter of gross domestic product (GDP), is essential for mitigating the impact of the economic crisis and for transforming Poland from a welfare state to a workfare society in line with Government's Vision 2030. The report has two main messages. First, Poland can take measures to reduce public expenditures on social sectors and public wages by around 2.3 percentage points over the next three years. Second, beyond supporting the fiscal adjustment required in the context of the economic crisis, public expenditure reforms can also help bring about structural changes envisioned as part of the Government's strategy for 2030. This report provides a comprehensive assessment of Poland's social sector and public wage polices and lays out options for reform. The summary report has five parts. The first part lays out the macroeconomic context. It emphasizes that Poland has weathered the global economic crisis remarkably well but that the recovery is likely to be feeble and subject to uncertainty. The next part discusses the fiscal fallout of the crisis and argues that public expenditure reform should be a crucial pillar for fiscal consolidation. Sections three to five contain the main findings of the report. Section three presents a list of important reforms of public expenditures on social sectors and wages in support of Vision 2030. Section four simulates the fiscal impact of public expenditure reforms, with a particular focus on state budget expenditures. The final section discusses how institutional reforms in the areas of medium-term and performance-based budget can support the reform agenda. Volume two presents the detailed analyses of social sectors and institutional reforms of public finance.

Users also downloaded

Showing related downloaded files

  • Publication
    Digital Africa
    (Washington, DC: World Bank, 2023-03-13) Begazo, Tania; Dutz, Mark Andrew; Blimpo, Moussa
    All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.
  • Publication
    Morocco Economic Update, Winter 2025
    (Washington, DC: World Bank, 2025-04-03) World Bank
    Despite the drought causing a modest deceleration of overall GDP growth to 3.2 percent, the Moroccan economy has exhibited some encouraging trends in 2024. Non-agricultural growth has accelerated to an estimated 3.8 percent, driven by a revitalized industrial sector and a rebound in gross capital formation. Inflation has dropped below 1 percent, allowing Bank al-Maghrib to begin easing its monetary policy. While rural labor markets remain depressed, the economy has added close to 162,000 jobs in urban areas. Morocco’s external position remains strong overall, with a moderate current account deficit largely financed by growing foreign direct investment inflows, underpinned by solid investor confidence indicators. Despite significant spending pressures, the debt-to-GDP ratio is slowly declining.
  • Publication
    Argentina Country Climate and Development Report
    (World Bank, Washington, DC, 2022-11) World Bank Group
    The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.
  • Publication
    World Development Report 2006
    (Washington, DC, 2005) World Bank
    This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.
  • Publication
    Classroom Assessment to Support Foundational Literacy
    (Washington, DC: World Bank, 2025-03-21) Luna-Bazaldua, Diego; Levin, Victoria; Liberman, Julia; Gala, Priyal Mukesh
    This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.