Public services for basic needs in Malaysia

This paper reports on results with respect to meeting basic needs from a larger study of the distribution of public expenditure in Malaysia. Both the paper and the larger study heavily rely on a household survey providing data on consumption of public services. The analysis shows that the poorest categories of Malaysians, namely the Malays, rural dwellers, and those living in the North, are the least well served by public utilities. But they are well represented in use of public medical care and primary education. What also emerges is that many of the poor are unable to avail themselves of certain services because their incomes are too low. If more of the poor are to have their children educated to higher levels, the out-of-pocket costs that constitute such a heavy burden for them probably will somehow have to be subsidized. If the poor are universally to have pure water and electricity it appears that fundamental changes will have to be made in policies for pricing the consumption of these services to reduce their rates to the poor.     

Population growth and food supply in sub-Saharan Africa

It is argued in this article that sub-Saharan Africa, given its present institutions and endowments of capital and technology, is already dangerously close to overpopulation. The rapid growth of its population projected for the next decades will greatly increase human misery and depress economic development. Specifically, rapid population growth will have disastrous effects on the region's ability to increase exports and provide people with food. There must be a search for new ways in which these effects could be mitigated. In sub-Saharan Africa fertility either continues to be very high or is increasing, in part due to some decline in traditional practices that reduce fertility, such as prolonged breastfeeding. This situation and the expectation of declining mortality imply that African population growth may increase further. Currently, population in sub-Saharan Africa is about half that of India and a third of China. There are 2 main reasons why reduced fertility in the next few decades is unlikely in sub-Saharan Africa as a whole: Africa has low literacy, high infant and child mortality, and low urbanization; and average African fertility rates may even increase for the next 20 years or so. The question that arises is what are the implications of continuing and rapid population growth for the African food supply. The region's cereal production is largely restricted to 4 grains, i.e., millet, sorghum, maize, and rice. The volume of grain production is less, by weight, than 60% of the production of roots and tubers. There are 2 main differences between the output of these crops in sub-Saharan Africa and the rest of the world: yields/hectare are lower in Africa than in elsewhere; and yields have generally been decreasing or largely constant in Africa. The low productivity has several causes. Today, population pressure has brought diminishing returns to traditional agriculture in much of the Sahel and the savanna, in parts of East Africa, Southern Africa, and parts of the West African forest belt. There is also the absence of the Green Revolution, i.e., the use of new high yielding seeds and new technologies in agriculture that has led to marked increases in yields in most other parts of the world. A totally different and more productive agriculture might evolve if African governments were to fundamentally change their vision. Existing production technology could allow substantial increases in the yields of many crops if some basic changes were made in the policies affecting agriculture. A way to achieve such change would be to make farming profitable. The effect of population growth in diminishing returns to agriculture also lends urgency to the need for family planning. Generally, population policy in Africa badly needs strengthening.     

Cost recovery in a project context: Some World Bank experience in tropical Africa

The shortage of government recurrent funding in Africa has led to widespread deterioration of public services. One reason for this shortage is the substantial consumption of public resources in Africa by parapublic organizations which elsewhere in the world cover costs or generate surpluses. In contrast, the World Bank emphasizes the development of institutions which cover costs either through sale of output or user charges. The Bank's experience with projects in non-market sectors is also of interest, e.g. primary education in which public subsidies predominate. Another reason for the shortage is that government budgeting – both revenues and expenditures – is rarely forward-looking. Aggregate future expenditure claims are often underestimated. Hence more attention to forward budgeting is needed. In general governments need to be far more concerned with getting projects which generate their own finance if broad-based public services are to become the rule.     

THE HOUSEHOLD DISTRIBUTION OF GOVERNMENT SERVICES FOR AGRICULTURE AND EDUCATION IN PENINSULAR MALAYSIA IN 1974

The paper reports on several results from a comprehensive study of the household incidence of public expenditure in Peninsular Malaysia in 1974. The results for education show a pro-poor distribution of expenditure when measured as a share of household income. Using however the criterion of each according to his needs (that is the number of school-age children per household) reverses this outcome. In agriculture, because of the importance of land settlement, benefits from public expenditure distribute predominantly in favor of the poor.
The research differs from the usual study of this kind in that individual government outputs such as school years, or fertilizer loans, were defined, and in the case of education their unit costs estimated and their distribution across households measured. In the case of education, both the costs of services from capital and the households' out-of-pocket educational costs were added to the current subsidies. As one consequence, it was seen that total expenditure for education in Malaysia exceeds one-eighth of GNP, nearly double the conventional estimate. Equally important, for the poor the burden of private costs for education even within a public system were seen to be very high.
The contrasts between the strong results for education, a broad based social service, and the less conclusive results for agriculture, an economic service which impacts directly on production, were instructive in suggesting the limitations of such research in measuring the effects of government budget activity on distribution.     

The population crisis in sub-Saharan Africa

The authors argue that sub-Saharan Africa, given its present institutions and endowments of capital and technology, is already dangerously close to overpopulation. Specifically, they suggest that projected rapid population growth will have disastrous effects on the region's ability to increase exports and provide people with goods.     

Resource mobilization in developing countries: Financial institutions and policies

Discussion in this paper of the areas and scope for domestic policy action aimed at improving the process of domestic resource mobilization, allocation and use is developed in several stages. First, the authors assess the progress made by LDCs in raising their rates of saving and investment over the past 25 years. Next, government policies — government tax expenditure and pricing policies, in particular — and their effect on public savings are discussed. This is followed by treatment of the issues of private saving performance and allocation, i.e. how to stimulate and make better use of household savings. Institutional and policy measures are suggested as means of promoting a more active role of the banking system. Brief reference is made to the role of development banks in project preparation and in tapping the capital market.     

From Prices to Incomes: Agricultural Subsidization without Protection?

Drawing from the experience of the direct income support programsrecently introduced in the European Union, Mexico, and the UnitedStates, this article highlights problems that may arise whenthe agricultural sector of a developing economy moves from price-basedsubsidization to less distorted income support. Such programsare a step in the right direction, but as currently implemented,they have many shortcomings. Moreover, developing countriesmay lack the necessary supporting arrangements needed to makesuch programs effective. The article argues that the programsshould not restrict the use of land, that the programs shouldlast for a stipulated period of time, and that the fiscal costsshould be contained by linking income support payments to worldprices.