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One of the Government of Bangladesh’s policy objectives is to provide for greater and more equitable resource allocation to the poor. The Government is committed to improving equity under the Poverty Reduction Strategy, and as stated in the Government’s Strategic Investment Plan (SIP) July 2003-June 2010, the Ministry of Health and Family Welfare (MOHFW) will shift the allocation of budget towards areas in the country with the greatest health, nutrition and population (HNP) needs. A World Bank study recently sent to the GOB titled, “Targeting Resources for the Poor in Bangladesh: Development of Guidelines and Tools”, reviewed several poverty alleviation programs in the public and NGO sectors in order to understand the strengths and weaknesses of the methods used in identifying and targeting the poor. Building on these, it introduces a new, objective technique, known as the Proxy-Means Test formula, that would complement the existing targeting efforts.
The government’s current allocation of budget for health services across districts and upazilas are centrally determined. Resource allocations are primarily driven by the capacity of the public health facilities and historical norms, rather than the actual health needs of the areas or the extent of poverty (as determined by the district’s Human Poverty Index or its Human Development Index). The following graph depicts this uneven and random pattern of resource allocation across districts, highlighting the geographical inequity (poor districts get much less government health spending than rich districts):
Current Per Capita Health Budget Allocations, by Poverty
Status of Districts in
HCR: Head Count Ratio
Thus effective targeting of health care spending
will require proper identification of both poor and non-poor households. The
major challenge of
The PMT formula generates a “score” for households, based on easily identifiable characteristics of families, such as location and quality of housing, ownership of goods, family size and structure, education and occupation of family members. A cut-off score is identified, based on which the households can be classified:
· poor households who are eligible for subsidies, and
· non-poor households who are not eligible for the subsidies.
The PMT formula has had success in other
developing countries. Field testing of the PMT model in
Source: The World Bank