State invests enough in health, education, or housing, on the level of investments in these respective
sectors as a percentage of the country's GDP, combining private and public investment, or should they
focus instead on the level of governmental expenditure, as indicated for instance by the share of the
public budget that goes to such sectors?
In low-income countries, where a large part of the population has a very low purchasing power -- and
one, certainly, too low for them to be an attractive market for private service providers, except at the
expense of quality --, it does seem sensible to require from governments that they make up for this
massive market failure: however efficient (indeed, precisely because they are efficiency-driven),
markets shall not, and could not, compensate for widespread poverty. In such contexts, setting as a
benchmark a minimum level of intervention of the government in meeting the costs of healthcare,
education, electricity or transport, appears as the only reasonable option. In order to ensure that the
basic needs of the population are met in all countries, but that the availability, accessibility and
adequacy of the services gradually increase as the ability for the government to deliver such services
improves, two separate indicators may be designed, referring respectively to the minimum public
expenditure per capita and to the expected public expenditure in the sector concerned as a percentage
of the country's wealth.
Thus, when experts convened in Chatham House to define the appropriate level of governmental
spending in healthcare, they settled on two targets, one representing the absolute governmental
spending per capita per year that should go to healthcare (86 USD), and the other representing the
percentage of the total GDP of the country that should go to healthcare (5 per cent): this latter
indicator, the experts noted, is important to include, since "[w]hile $86 may ensure priority services
for everyone, it is clearly insufficient to meet all important health needs, and GHE [governmental
health expenditure] therefore needs to be progressively increased [in line with the overall growth of
the country's economy]"; the former indicator however is equally important to maintain, since
"GHE/GDP of 5 per cent may be insufficient to ensure priority services in poor countries", and
therefore it is justified, in these poor countries, to set a minimum benchmark corresponding to what
would seem to cover at least basic health needs. As to the 5 per cent figure itself as a measure of the
government health expenditure to the GDP, it is seen as the percentage that is "generally required for
limiting the proportion of [out-of-pocket payments] to 20 per cent of [Total Health Expenditure
(THE)], which in turn is generally needed for achieving low rates of catastrophic and impoverishing
health expenditure".86 It is noteworthy that these targets express a minimum level of public
expenditure in healthcare : unless governments invest enough in healthcare, poor families risk having
to pay beyond their means, leading to a spiral of indebtedness and poverty from which many may be
unable to escape. Therefore, setting targets of governmental spending, rather than targets of total
health expenditures (including both public and private spending), seemed the most appropriate route.
c) Positional goods
That is not all, however. Indeed, privatization also poses a third challenge, that cannot be answered
simply by the strengthening of the regulatory framework applicable to the private sector. Even in
situations where even low-income groups have access to the good or service concerned and where
appropriate supervision ensures that compliance with essential quality standards, can there be a risk
that, while the needs of the poor are met, the rich still have access to much better services thanks to the
coexistence of different channels through which one can have access to healthcare, housing or
education ? If there is such a risk, should this be a concern ? A distinction should be made in this
regard between rights that, to be effectively enjoyed, should be distributed in conditions of relative
equality, and rights to some amount of a good or some level of provision of a service, however much
better the situation of others. For instance, education is a positional good in ways in which housing is
not : for the right to housing to be satisfied, it matters whether each household has access to adequate
86
Shared Responsibilities for Health: A Coherent Global Framework for Health Financing. Final Report of the Centre on
Global Health Security Working Group on Health Financing (London, Chatham House, Royal Institute for International
Affairs, 2014), at 12.
18
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