Globalization, equity and health

Millions of people in developing countries around the world lack access to basic health care. Yet, developing countries still spend very low amounts on health. This paper questions whether developing countries can increase spending on health care, in the context of the impact of structural adjustment and liberalization.

The paper discusses the various dimensions of globalization, presents the growth record of globalization and analyses government spending in the era of globalization. Two suggestions for increasing public spending are discussed in the paper: governments should spend at least a certain percentage of their revenue on health; and government spending on health should be more equitable.

The paper finds that:

• adjustment has led to downsizing governments
• globalization reduces the ability of governments to spend resources on social programs and to tax capital to finance such programs
• public health spending is higher when a country has higher income, which suggests that governments in poor countries tend to spend less on health care
• lower spending on health care is a greater problem in poorer countries than the equitable distribution of health care

What are the implications of these findings for increased spending on health? The paper argues that getting governments in poorer nations to spend more on health would be difficult for the following reasons:

• public spending increases as income goes up, but incomes have not increased in developing countries over long periods
• globalization has reduced the ability of governments to tax capital, so governments have less resources available to finance larger health spending
• developing countries have undergone a ‘minimize government strategy’ as a result of structural adjustment during the last two decades

The paper suggests that some mechanism of international transfer of resources for enhancing health expenditure must be in place. It recommends that there should be a large transfer of resources from developed to developing countries for health spending.