Health and health expenditures in adjusting and non-adjusting countries

The focus of this study is on the impact of World Bank structural adjustment operations on health expenditures and outcomes. We compare trends and levels of real per capita public spending on health, private consumption (which is the resource base for private health expenditures), and groupings child mortality indicators in four groups of countries. These are: (i) countries that started to borrow for the adjustment process early--Early Adjustment Lending (EAL) countries, (ii) Other Adjustment Lending (OAL) countries, (iii) Non-Adjustment Lending countries whose economies grew during the period 1985-1990 (NAL+), and (iv) Non-Adjustment Lending countries whose economies did not grow (NAL-). The NAL- group provides a 'counterfactual' for comparison with the two groups of adjusting countries. The results show that the fear about possible declines in health care spending in adjusting countries is unwarranted for EAL countries, that is those countries that started the adjustment process early and took it seriously. Government spending on health care increased on average for this group of countries, as did private consumption levels. Government health care expenditures also continued to increase in OAL countries, but mixed GDP growth performance has left little room for increased private spending. However, those countries that showed negative growth in the late eighties and did not start an adjustment process, fared worse throughout: real per capita public health care spending declined during the late eighties and increased less than in the other countries during 1989-1993, while private consumption has declined steadily. The trends in child mortality indicators show tremendous and continuing progress during the past two or three decades with few discernible differences among the four country groupings.