3. INTRODUCTION
•Fiscal space can be defined as ‘the capacity of
government to provide additional budgetary resources
for a desired purpose without any prejudice to the
sustainability of its financial position’
•The government’s ability to devote more resources to
health without compromising expenditure in other
sectors that need to achieve their development
objectives in the country
4. RATIONALE
• Does the government have enough revenue to increasing health spending?
• Tool used to assess, monitor, or predict the sources and level of public resources
available for the health sector
• Examines whether and how the government could feasibly increase its
expenditure in the short-to-medium term, in a way consistent with the country’s
macroeconomic fundamentals
• Often prompted by the need to raise additional public resources for the health
system:
oTo expanding insurance coverage
oImprove the efficiency of spending
oEnsure effective performance and sustainability of health systems
5. ROADMAP FOR ASSESSING FISCAL SPACE FOR
HEALTH
• 3 Components:
Component 1: Identify the need for an additional fiscal space for
health
Component 2: Assessing the potential for increasing fiscal space for
health from the five pillars
Component 3: Summary and conclusions
6. Identifying the Need for an Additional Fiscal
Space for Health
• Lack of adequate/sustained levels of resources identified as a
constraint to achieving health outcomes, especially in low-income
countries
• High OOPs posing as a barrier to access to health care services
• High dependence on external assistance
7. Assessing the Potential for Increasing Fiscal
Space for Health from the Five Pillars
• Conducive macroeconomic conditions
• Re-prioritization of health within the government budget
• Increase in health sector specific resources
• Health sector specific grants and foreign aid
• Efficiency improvement within the health sector
• Borrowing
8. Conducive Macroeconomic Conditions
• Economic growth
High GDP → ↑potential for additional fiscal space
• Government revenue
High revenue → ↑ potential for additional fiscal space
9. Re-prioritization of Health within the Government
Budget
• Higher priority should be given to health
• Increase in GGHE as a % of GGE
(Abuja target at least 15%)
10. Increase in Health Sector Specific Resources
• Earmarked taxation on products such as alcohol and tobacco
(Also reduce the number of illnesses and accidents)
• Mandatory health insurance
11. Health Sector Specific Grants and Foreign Aid
• Health funding by donor agencies
• Unreliable source
12. Efficiency Improvement within the Health Sector
• Efficiency gains
• Efficient use of limited resources in the health system
• Interventions aimed at technical and allocative efficiency of health
spending
13. Borrowing
• Feasibility depends on the general assessment of macroeconomic
potential and through health sector-specific grants and foreign aid
14. Summary and Conclusions
Fiscal Space Source Key Information Prospects for Fiscal Space
Macroeconomic conditions GDP growth rates reduced from 8 to
4.8% due to global economic crisis
Revenues as % of GDP projected to
remain at 12% but not likely to translate
into fiscal space for health
Moderate
Re-prioritization of health in the
government budget
The government reached its
commitment to allocate 11% of the
budget to health, and it is expected to
remain at this level through 2011
Limited
Health sector-specific resources SHI is being discussed but is a longer
term plan No discussions of earmarked
taxes
Limited
Health sector-specific grants and foreign
aid
ODA for health is 22% of total health
spending and has been on an upward
trend
Moderate
Efficiency gains Inefficiencies in the public finance
system prevent resources from being
allocated to programs in the health
strategy and reaching service providers.
Good
15. REFERENCES
1. Peter S. Heller. 2006. The prospects of creating ‘fiscal space’ for the
health sector. Available online
http://heapol.oxfordjournals.org/content/21/2/75.full.pdf%20html
#cited-by
2. Ajay, Tandon; Cheryl, Cashin. 2010. Assessing Public Expenditure on
Health From a Fiscal Space Perspective
