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Finance & Development, March 1980
Article

Sectoral priorities for meeting basic needs: Approaches to meeting the basic needs of the poor drawn from Bank studies of various sectors

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
March 1980
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Shahid Javed Burki

The “basic needs approach” to development reflects the necessity to ensure the access of the poor to a bundle of essential goods and services. While some of the components of this bundle may vary from country to country, there is a common core that includes education, basic health, nutrition, water and sanitation, and shelter.

Developing countries have made some progress in meeting these needs over the last two decades. There has been, on average, a slight improvement in the availability of food per capita; the total number of children enrolled in schools increased from 142 million in 1960 to 315 million in 1975; and there has been some expansion in the supply of water and sewerage services and in the amount of housing available to the poor. These improvements have had an impact. They have contributed to a 15 per cent increase in average life expectancy at birth in developing countries, from 47 years in 1960 to 54 years in 1977.

In spite of these improvements, living conditions in the developing world remain disquieting, as illustrated by a number of indices (see the table). For instance, there still remains a large gap in life expectancy at birth between the developed and developing countries: the average is 74 years in the developed, and only 54 years in the less developed, areas. The infant mortality rate in these countries is estimated at 100 per thousand of all live births, compared with 25 in the industrial nations. The figures for female life expectancy at birth show a significantly wider gap between the two groups of countries than those for males.

There are about 850 million people in developing nations who have little or no access to school. Of these illiterates, 250 million are children and 400 million are adult women. Only one fifth of the developing countries’ population has access to adequate water supply—as a result, it is estimated that the women spend one tenth of their time in collecting water for consumption within households. Nearly two fifths of the population in these countries remains without adequate shelter.

Telling as these indices are, they should not be interpreted to mean that international action programs are needed in all these areas. While a global approach may appear attractive, in that it offers a well-defined set of targets for planning purposes, such an effort may make very little sense in operational terms. Plans to provide people with basic needs have to be evolved individually for each country.

As a result, the real burden of decision-making falls on the countries themselves. The main purpose of the World Bank’s recently concluded work program on how to meet peoples’ basic needs was to assist interested countries in planning to provide for the unmet basic needs of their citizens. The program included a number of conceptual, sector, and country case studies. This article summarizes some of the main conclusions of the work on education, health, nutrition, water supply, sanitation, and shelter.

There are a number of different ways to restructure activities in the relevant sectors of a national economy in an effort to satisfy the unmet needs of large segments of the population. Whether these steps should actually be taken depends on the prevailing political, social, and economic circumstances in each case, some of which are discussed later.

Interventions in education

In education, efforts need to be concentrated in three areas: (1) expanding basic education opportunities, especially for women; (2) improving the quality of education and making it more relevant to local needs; and (3) improving the out-of-school environment of the poor.

The priority for the majority of developing countries is to expand basic education opportunities for the poor. This can be achieved in part by providing additional services for the poorest segments of society—in particular by expanding opportunities for primary school age children and for poorly educated or uneducated adults, especially women. The education of women is important not only to enable them to develop their own potential but also— because their function in most societies is to bring up children—to improve their attitudes toward education in general, and their children’s education in particular.

The relevance and efficiency of the education process can readily be improved in most developing countries at all educational levels. At the secondary and higher levels, the most immediate need is to make education more relevant to the world of work. For primary and adult education, greater emphasis also needs to be placed on ensuring that students obtain the skills that are relevant to local social and physical conditions. For most developing countries, these changes imply major revisions in the content and style of teaching, with accompanying changes in teacher training programs. They also require substantial changes in the ways in which education and work places are integrated.

In some countries, special attention may need to be given to community preschool programs. Such programs would help to reduce the differences between rich and poor children of preschool age and would also help to reduce the burden of child care on women.

While such policies would require substantial resources to implement, the effects on the educational budget could include a reduction of total costs. The efficiency of most school systems can be improved in several ways: by reducing wastage (brought about by students repeating or dropping out of classes, or by classes that are too big); by instituting programs to make full use of existing capacity—that is, by using schools or teachers for double shifts or summer sessions; and, where teachers are in short supply, by using substitute teachers (such as students, workers, or retired persons).

Health; water; shelter

The health of the great majority of the people in developing countries has remained relatively poor despite high levels of expenditure in this sector. This is not due to a lack of technical solutions to the problems of health care in developing countries, but to the way in which resources are spent on health services. In addition, many health problems are also affected by a wide range of causes not directly related to health, such as poor nutrition or sanitation. Curative health care has been emphasized at the expense of preventive, and urban health care at the expense of rural. Many millions of poor people in rural areas have no access to health care facilities. What is required is a commitment to a community-based health care system: a redirection of a significant amount of resources away from urban curative health services toward primary health care for the underserved (mainly rural) populations. Such an approach needs special care in the selection and training of health workers, in the supervision and support of village health workers, and in the administration and management of buildings, vehicles, and drugs. To be effective, the approach requires community participation in decision-making, finance, and organization of the local system. Women (particularly when pregnant and lactating) and children under five are especially vulnerable groups requiring special attention.

Basic needs indicators
Life expectancy at birthAdult literacy rates
(In years)(In per cent)
Country groups1196019701977196019701975
Low income (up to $300 per capita)424750283539
Middle income (over $300 per capita)535760566571
All developing475154394651
Industrialized697274989999
Source: World Bank, World Development Report. 1979.

As discussed in the article in this issue by Alan Berg, the primary nutrition problem faced by the world today is not one of the global supply of food—today’s world output of grain alone could serve everyone daily with 3,000 calories, which is well over any definition of a minimum level of consumption; nor is it mainly a problem of balance between proteins and calories—most studies have shown that where calorie intake is adequate, even among the poor, protein needs are also satisfied. The nutrition problem is one of distribution between countries, regions, and income groups and within households. In general, it is the very poor—who spend the largest proportion of their income on food—who suffer most from malnutrition. Meeting nutritional needs will require a substantial increase in food production and an increase in the incomes of the poor. Berg’s article suggests several strategies for achieving these objectives.

The costs of water supply and sanitation services could be considerably reduced by aiming for more modest standards. Instead of supplying piped water to houses, stand-pipes could be installed in the urban areas, and standpipes or improved village wells and springs in the rural areas. There is a very wide variety of technologies available for sanitation and water disposal, ranging from a conventional flush system to a simple vault or borehole, all of which are satisfactory from a health point of view. Major improvements in standards are often attainable along these lines without significant additional financial commitments.

Most developing countries need to expand housing in urban and rural areas. But the problem of urban shelter is more acute. The number of very poor households in the urban areas is expected to double between 1980 and 2000. Basic shelter for all but the poorest 20 per cent can be provided mainly through private schemes. Government support is required primarily to facilitate the transfer of land and to provide such services as water and sanitation.

Linkages and priorities

The activities of the various sectors involved in meeting basic needs are closely interrelated. In most cases, the efficacy of the activities of one sector depends largely on the activities of other sectors. For instance, the impact on health of investment in sanitation facilities depends on education in personal hygiene. The effectiveness of expenditure on health, too, is critically linked to improvements in the availability of other goods and services needed to meet basic needs. Curative medical services are likely to be ineffective if people are chronically malnourished, drink germ-infested water, have no sanitation facilities, and follow poor health practices in their personal lives. The provision of additional food to the malnourished may not help them either, if they do not change their nutrition practices.

In extreme cases, action in one sector without corresponding action in others can even be counterproductive; if a water supply system is installed without drainage, germs and insects that spread diseases are attracted. More often it is expensive to pursue a program in one sector without synchronizing it with other sectors. For instance, in terms of the proportion of gross domestic product (GDP) committed, Sri Lanka and Mali have placed the same amount of emphasis on health and education, but Sri Lanka has had better results, partly because its programs recognized linkages and complementarities between different sectors.

The manifold linkages between sectors raise an important question: must all basic needs be met simultaneously or can a country establish a set of sectoral priorities? This question is important; efforts to improve all sectors at once would impose impossible administrative and financial costs on many developing countries. The answer lies in identifying key sectors that directly affect the quality of life of the poor.

A cross-country statistical analysis by Bank staff suggests a strong relationship between education—measured by literacy rates—and life expectancy at birth. The statistical relationship is even stronger if life expectancy is treated as a variable dependent on female literacy. This type of statistical analysis does not, of course, imply that better education “causes” longer life, or that the expectation of longer life “causes” people to invest more time on education. However, some further statistical tests as well as common sense indicate that education tends to lead to better health, which, in turn, leads to higher life expectancy.

Nutrition and health care are also singled out as important in this cross-country analysis, but their relationship to life expectancy is not as close as that of education. However, evidence available from country studies suggests that improvements in education, nutrition, and health considerably reduce the need to make large investments in shelter, water supply, and sanitation. For instance, the experience of Sri Lanka indicates that if people are educated, to some extent this can reduce the necessity for improvements in the quality of water, since people can be taught to boil low-quality water and to use clean utensils for storing it. Education in nutrition and in hygiene and sanitation can similarly substitute for some basic health services.

Reallocating resources

Developing countries have already committed a high level of their total resources to education and health and have ambitious plans for the extension of water and sanitation services. In many developing countries, educational expenditures per capita have doubled over the past 25 years, growing twice or even three times as fast as GDP. Education at present typically accounts for nearly 5 per cent of GDP in developing countries and for between 18 and 25 per cent of the public budget. Similarly, health care services receive high priority in all developing countries, most of which have publicly-financed health care systems and programs of investment in sanitation, water supply, and health education. Fragmentary evidence suggests that public sector expenditure on health services amounts to 3-4 per cent of GDP. Additional sums are spent on such health-related activities as family planning, water supply, and sanitation. In total, as much as 5-8 per cent of GDP is spent on health care, that is, about US$75 billion annually in the developing countries as a group.

But aggregate social sector resource expenditure is not necessarily associated with providing for the basic needs of the very poor. For instance, Egypt’s present education budget amounts to 10 per cent of GDP, yet only 44 per cent of the population is literate, and primary school enrollment is estimated at 72 per cent (whereas the average enrollment for all developing countries of the income group to which Egypt belongs is 92 per cent). Mali is spending up to 5 per cent of its GDP on health services—a proportion much larger than the average for countries at its level of income—but the health of its people is well below the “normal” for this group of counties. Sri Lanka’s success in meeting the needs of its population is not due primarily to high levels of public expenditure on social sectors. Its expenditure on social programs, including the rice subsidies, averaged only 11 per cent of GDP during the 1960s.

Basic needs have generally remained unmet not because public expenditure on them is insufficient but because it has been misdirected and because it does not benefit all population groups. In Brazil, for instance, the proportion of expenditure on public health devoted to preventive medicine declined from 87.1 per cent in 1949 to 29.7 per cent in 1975. In Pakistan, 40 per cent of the education budget goes for university training, while only 3 per cent of the total student body attends university classes. Not only are the resources in social sectors often spent on activities that contribute little to meeting basic needs, but also the disadvantaged and especially vulnerable groups have little access to them. In Colombia, the health subsidies for urban populations are five times as large as those going to people in the rural areas.

It is clear, therefore, that the emphasis on social expenditure in the developing world has not always meant an emphasis on the provision of basic needs. In the high priority sectors of education, nutrition, and health, major emphasis should be placed on the redirection of efforts within sectors. It is vital to reallocate some resources from higher to lower levels of education; from curative to preventive medicine; from urban to rural health care; and from urban and/or large-scale water supply and sanitation projects to village and community water and sanitation schemes. It is also imperative to make special efforts to reallocate these resources so that they reach the poorer segments of the population. It is particularly necessary to make it possible for women to educate themselves and to shield children from disease and hunger.

The household sector

The activities of the household sector are particularly relevant. In developing countries, this sector produces a substantial amount of “nonmonetized” goods and services for its own use. While it may account for as much as 40 per cent of “full” (that is, accounted as well as unaccounted) income in these countries, its share is even higher in producing the goods and services that are important for meeting basic needs. However, studies of individual countries point to the problems faced by the household sector in meeting the basic needs of the more disadvantaged groups in the society, namely women and children below the age of five years. In many countries, households discriminate against these groups: women and children receive relatively low priority in the distribution of food, even though women may be required to perform physically taxing tasks. Some studies show that if the time spent by women in household activities is added to the time spent as farmhands, their workday is about 20 per cent longer than that of men.

Removing discrimination against women and children will, of course, help to meet their basic needs by providing them with additional goods and services. In addition, women can play a critical role in the production and use of goods that are important for meeting these needs. They perform a vital function in the adoption of practices conducive to good nutrition, health, and hygiene, for example. Further, if properly educated, women can make more systematic and enlightened use of their family income in purchasing goods and services that contribute to meeting basic needs. Our studies show that men in the developing countries are less prone to spend on goods that meet the basic needs of the household.

This finding highlights the need to gear policies and programs toward the participation of women in the economic life of the household. In addition, efforts should be made to increase the opportunities for women to increase incomes and participate in administrative and decision-making processes. Although these efforts would challenge traditional male supremacy in these areas, and therefore may be difficult to implement, it is important to bring women into the development process and especially into programs aimed at meeting the basic needs of the general population.

Financing problems

In addition to the reallocation of resources, increased emphasis on the provision of basic needs raises a number of questions on how to finance them. In the projects and programs aimed at meeting basic needs, recurrent costs are quite heavy in relation to capital costs. Allowance must, therefore, be made for continuing financial support rather than for a qnce-and-for-all commitment for capital costs. The obvious solution to the problem of recurrent costs is to levy charges on the beneficiaries to cover these costs. This, however, may be both difficult to administer and undesirable, because the wider social benefits of these projects very often far exceed the private benefits to the individual consumer. This is clearly true, for example, of vaccination programs or programs of health education where the main beneficiary is the community at large rather than the particular individual involved in the program. In other cases, it may be difficult to charge for the services because they are provided communally. Since a major objective of the programs to meet basic needs is to provide universal access (especially for the very poor), any system of charges is likely to exclude the very people for whom the programs are most essential. Yet, despite these problems, unless some system of generating finance on a continuous basis is an intrinsic part of programs to meet basic needs, they are liable to be limited in coverage and in duration as the national government becomes overburdened with fiscal liability.

Political commitment

Changes are needed at the policy level to meet the basic needs of large numbers of people—including the reallocation of resources within sectors, concentrating them to benefit special groups, and committing government finance for maintaining social development programs. This calls for a political will that cannot be readily mustered by all societies. There are a number of instances of powerful constituencies blocking the transfer of public financial and administrative resources from secondary and university education to primary education, from urban to rural health, from high-cost curative health facilities to relatively low-cost preventive care. Such a transfer becomes even more difficult when it is linked with the further stipulation that the users of nonbasic services need to pay a price even higher than that justified on social grounds.

Some countries have been able to overcome such political obstacles to meeting basic needs simply by increasing the resources committed to social sectors, and especially to the sectors that affect basic needs. For instance, it is for political reasons that many countries—Egypt, Pakistan, and even Sri Lanka—found general food subsidy programs, rather than specific subsidies, a practical way of reaching the poor. Programs such as these may not have been politically feasible unless groups other than the poor had been allowed to benefit. But such solutions can be very expensive. According to one estimate, Egypt would need to spend the equivalent of three times its gross domestic investment to meet the basic needs of all its citizens, while providing them simply to the poorest and most neglected and recognizing the linkages between them would cost less than one fourth as much.

But political problems should not be allowed to constrain totally the effort needed to meet basic needs. Social and economic groups that see in these programs a high economic cost for themselves should be persuaded that procrastination may involve even higher penalties. The burden imposed by the alleviation of poverty may not only be financial; if poverty is allowed to persist in a country, this can bring very heavy economic, social, and political costs.

Administrative management

Even if political constraints on providing for basic needs can be overcome—and they have been overcome in a variety of political circumstances—serious administrative problems may still remain.

Successful programs for meeting basic needs require different administrative approaches from those involved in the more traditional capital- and technology-intensive development work. Such programs depend for their success on the substantial involvement of, and response by, the public that they intend to reach. When the intended beneficiaries are poor and geographically dispersed, additional efforts are required to achieve program success. Two principal administrative structures can be built for this purpose: official bureaucratic systems that provide basic goods and services, and organized groups of the intended beneficiaries themselves. The Sri Lanka food subsidy program is an example of the former approach, and the various village development programs in Korea illustrate the latter approach.

Administrative problems become more severe when a deliberate effort is made to supply basic goods and services quickly. These problems arise in part because the production structure of the economy is not, over the short run, appropriate to the new consumption structure. Consequently, prices of basic goods are likely to rise, shortages may emerge, and some of the programs may be rendered ineffective. It may be necessary to make special arrangements to overcome these transitional problems. Some nutritional programs are good examples of some of these transitional activities.

The Bank’s work on meeting the basic needs of the poor offers some guidelines to a country concerned with improving the access of more of its people to essential goods and services. Many countries already spend a relatively large proportion of their GDP on the sectors involved in meeting basic needs. However, very often the funds go to activities that are inappropriate for the poor and disadvantaged, or that do not reach them at all. Resources need to be reallocated within sectors, so that education, health services, water, sanitation, and shelter can become available to more low-income people in a form that is directly relevant to developing their potential.

However, the ultimate criterion of success of a program aimed at meeting basic needs is the individual country’s political commitment to the program and the commitment that the efforts will be supported on a continuing basis.

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