Aid Effectiveness and the Public Sector: Comparative Advantages of Public Sector Health Systems in meeting the Millennium Development Goals

A review of the literature reveals that strong public sector financing of health systems is associated with better health outcomes. Countries with higher percentage of total health expenditure via governments versus private sources have a longer health-adjusted life expectancy (1). In developing countries, Government spending on health is as important as income as a determinant of child and maternal mortality rates. (2). The public sector is also critical in the provision of health care. A study of 15 Asian countries found that no low- or middle income countries had come close to attaining universal access without a predominantly public sector health care delivery system (3). Further, an analysis of DHS data shows that in low-income countries with better access to health care, most of the poor depend on public health services. In countries where over 40% of the poorest quintile has access to assisted delivery, less than 5% are performed in the private sector. The low and middle-income countries with the most progress in cutting child mortality over the last 10 years all have primarily public sector health systems.

Most poor countries that have achieved significant reductions in child and maternal mortality rates, near-universal access to health care including for the poorest, and expansion of critical health services have in common a commitment by their governments to strong public financing and provision of health services. The public sector is particularly critical in assuring the capacity of a well-trained workforce, scaling up services to the most vulnerable, and in ensuring quality, equity and sustainability in health care delivery.