Challenges to MDG Achievement in Low Income Countries : Lessons from Ghana and Honduras

This paper summarizes the policy lessons from applications of the Maquette for MDG Simulations (MAMS) model to two low income countries: Ghana and Honduras. Results show that costs of MDGs achievement could reach 10-13 percent of GDP by 2015, although, given the observed low productivity in the provision of social services, significant savings may be realized by improving efficiency. Sources of financing also matter: foreign aid inflows can reduce international competitiveness through real exchange appreciation, while domestic financing can crowd out the private sector and slow poverty reduction. Spending a large share of a fixed budget on growth-enhancing infrastructure may mean sacrificing some human development, even if higher growth is usually associated with lower costs of social services. The pursuit of MDGs increases demand for skills: while this encourages higher educational attainments, in the short term this could lead to increased income inequality and a lower poverty elasticity of growth.

Bibliographic Details

Main Authors:	Bussolo, Maurizio, Medvedev, Denis
Language:	English
Published:	World Bank, Washington, DC 2007-11
Subjects:	ACCESS TO SAFE WATER, ACCOUNTING, AGGREGATE COSTS, ALLOCATION, ANNUAL GROWTH, ANNUAL GROWTH RATE, ANNUAL WAGE, AVERAGE LEVEL, BASELINE SCENARIO, BASIC EDUCATION, BASIC SERVICES, BOND, BOND ISSUES, BORROWING, BUDGET CONSTRAINTS, BUDGET ENVELOPE, CAPITAL SPENDING, CHILD HEALTH, CHILD MORTALITY, CHILD MORTALITY RATE, CHILD MORTALITY RATES, COMPUTABLE GENERAL EQUILIBRIUM, CONSUMERS, CONSUMPTION GROWTH, CONTRIBUTION, CONTRIBUTIONS, COST ESTIMATES, COUNTRY SPECIFIC, CURRENT PRICES, DATA COLLECTION, DEBT, DEBT SUSTAINABILITY, DEMAND FOR SERVICES, DEPENDENT VARIABLE, DEVELOPING COUNTRIES, DEVELOPMENT ECONOMICS, DEVELOPMENT POLICY, DEVELOPMENT STRATEGIES, DISEASES, DISTRIBUTION OF INCOME, DISTRIBUTIONAL EFFECTS, DOMESTIC BORROWING, EARNINGS, ECONOMIC GROWTH, ECONOMIC POLICIES, ECONOMIC SHOCKS, EDUCATION SPENDING, EDUCATIONAL SERVICES, EMPIRICAL LITERATURE, ENVIRONMENTAL RESOURCES, ESTIMATED ELASTICITY, EXCHANGE RATE, EXCHANGE RATES, EXTERNAL DEBT, FISCAL SUSTAINABILITY, FOREIGN BORROWING, FOREIGN CURRENCY, FOREIGN GRANTS, FUTURE GROWTH, FUTURE INCOME, GENDER DISPARITY, GENDER EQUALITY, GENDER GAP, GINI COEFFICIENT, GOVERNMENT BUDGET, GOVERNMENT EXPENDITURES, GOVERNMENT POLICIES, GOVERNMENT SPENDING, GROWTH COMPONENT, GROWTH PERFORMANCE, GROWTH RATES, HEALTH EXPENDITURES, HEALTH OUTCOMES, HEALTH SECTOR, HEALTH SERVICES, HEALTH SPENDING, HIGH GROWTH, HIGH GROWTH RATE, HOUSEHOLD WELFARE, HUMAN CAPITAL, HUMAN DEVELOPMENT, INCOME DISTRIBUTION, INCOME GROWTH, INCOME INEQUALITY, INCOME LEVELS, INCOMES, INCREASING INEQUALITY, INDEPENDENT VARIABLE, INEQUALITY OUTCOMES, INFANT, INFANT MORTALITY, INFANT MORTALITY RATE, INFRASTRUCTURE DEVELOPMENT, INFRASTRUCTURE SERVICES, INTEREST PAYMENTS, INTERNATIONAL COMMUNITY, INVESTING, KIDS, LABOR FORCE, LABOR MARKET, LABOR MARKETS, LABOR SUPPLY, LEVELS OF PRODUCTIVITY, LIVE BIRTHS, LOCAL CURRENCY, LOW INCOME, LOW-INCOME, LOW-INCOME COUNTRIES, MACROECONOMIC PERFORMANCE, MALARIA, MARGINAL RETURNS, MATERNAL MORTALITY, MATERNAL MORTALITY RATE, MATERNAL MORTALITY RATES, MATH, MEDICAL CARE, MILLENNIUM DECLARATION, MILLENNIUM DEVELOPMENT GOALS, MINISTRY OF EDUCATION, MINISTRY OF FINANCE, MORTALITY, NATIONAL AUTHORITIES, PER CAPITA GROWTH, PER CAPITA INCOME, POLICY ALTERNATIVES, POLICY IMPLICATIONS, POLICY MAKERS, POLICY RESEARCH, POLICY RESEARCH WORKING PAPER, POOR COUNTRIES, POOR HOUSEHOLDS, POPULATION GROUPS, POPULATION GROWTH, PORTS, POVERTY LINE, POVERTY LINES, POVERTY REDUCTION, PRIMARY SCHOOL, PRIVATE CONSUMPTION, PRIVATE INVESTMENT, PRIVATE SECTOR, PRIVATE SECTOR GROWTH, PROGRESS, PUBLIC, PUBLIC BUDGET, PUBLIC CONSUMPTION, PUBLIC EDUCATION, PUBLIC EXPENDITURE, PUBLIC EXPENDITURE MANAGEMENT, PUBLIC EXPENDITURE REVIEW, PUBLIC EXPENDITURES, PUBLIC HEALTH, PUBLIC INFRASTRUCTURE, PUBLIC INVESTMENT, PUBLIC INVESTMENT IN INFRASTRUCTURE, PUBLIC POLICY, PUBLIC PROVISION, PUBLIC SAFETY NETS, PUBLIC SECTOR, PUBLIC SECTOR EFFICIENCY, PUBLIC SECTOR SERVICE DELIVERY, PUBLIC SERVICE, PUBLIC SERVICES, PUBLIC SPENDING, PURCHASING POWER, QUALITY OF EDUCATION, RATES OF GROWTH, REAL EXCHANGE RATE, RESOURCE NEEDS, RESPECT, RISING DEMAND, ROADS, RURAL AREAS, SAFE WATER, SAFETY NETS, SANITATION, SANITATION FACILITIES, SANITATION SERVICES, SAVINGS, SCHOOL AGE, SCHOOL FEES, SECONDARY SCHOOL, SECONDARY SCHOOLS, SERVICE DELIVERY, SERVICE PROVISION, SKILLED WORKERS, SLUM DWELLERS, SOCIAL AFFAIRS, SOCIAL INDICATORS, SOCIAL OUTCOMES, SOCIAL SERVICE, SOCIAL SERVICES, SOCIAL SPENDING, SPILLOVER, SPILLOVER EFFECTS, SUSTAINABLE ACCESS, TAX, TAX RATE, TAXATION, TERTIARY EDUCATION, TOTAL COST, TOTAL COSTS, TOTAL PUBLIC SPENDING, UNIVERSAL PRIMARY EDUCATION, UNSKILLED LABOR, UNSKILLED WORKERS, URBAN AREAS, WAGE, WAGE DIFFERENTIALS, WAGE GROWTH, WAGES, WORKFORCE, WORLD TRADE, YOUNG ADULTS, YOUNG CHILDREN, YOUNG PEOPLE,
Online Access:	http://documents.worldbank.org/curated/en/2007/11/8665513/challenges-mdg-achievement-low-income-countries-lessons-ghana-honduras https://hdl.handle.net/10986/7544
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