Equity and Efficiency in Health Status and Health Services Utilization: A Household Perspective (Distinguishedl Lecture)

Abstract

The objective of this paper could be phrased as follows: What are the health consequences of changes in public fiscal and income policies? This is an important question, especially in times where programmes of macroeconomic structural adjustments are being implemented in many developing countries. The health consequences of these policies continue to be debated. Some argue that the main victims are mainly the poor and the vulnerable [cf. Cornia et al. (1987) and (1988)]. Others maintain that the longer term benefits will more than compensate for short-term losses and that the real test is to compare with the consequences of not making the adjustments. The conceptual and empirical foundation of the debate seems to be less than satisfactory, however. It is our view that to understand the health consequences of such policies a careful examination of three issues are required: (a) the existing pattern of disease; (b) the initial distributional structure (equity pattern) of public policies; and (c) the behavioural response of households in allocating resources towards health-promoting activities given (a) and (b). Our approach is necessarily context specific. It is in line with Streeten's (1988) conclusion that ..... the most important general lesson that emerged was that there are no general lessons, and that each case has to be treated separately and on its merits". Our purpose is to provide an overall general framework that serves as a guide to examine specific cases. For more detailed theoretical analysis, see Diop (1990), and for an empirical application, see Diop and Sirageldin (1990).