World Bank for better targeting of subsidies

NEW DELHI: Today the benefits of government spending on health and primary education are overwhelmingly usurped by those who are relatively better off. Money meant for the poor does not reach those for whom it is intended. Stating this at a luncheon meeting with journalists, the newly appointed World Bank chief economist for South Asia and lead author of the World Development Report 2004, Shantayanan Devarajan, pointed out that the answer is two-fold.
One, shift from tertiary to primary spending i.e. from spending on say higher education and hospitals to primary schools and primary health centres. And two, improve the quality of service delivery by bringing in greater accountability.
This is best done by strengthening the relationship between the beneficiary and the service provider. Where the service provider is a government agency, the problem is compounded by the fact that the relationship is indirect — citizens influence politicians who frame policy, but the latter do not usually have direct control over service providers. This results in service providers getting away with shoddy delivery as seen in the high level of absenteeism in primary schools and health centres.
Dismissing the idea that the state is inherently incapable of delivering better quality service, Dr Devarajan said dissemination of information plays a crucial role in forcing accountability. This combined with decentralisation so that there is more direct accountability could ensure that the benefits of critical spending on social infrastructure reach those for whom it is intended.