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Demands for ramping up health expenditures are at an all-time high. Countries’ needs for additional health resources include responding to the COVID-19 pandemic, closing gaps in achieving the Sustainable Development Goal in health in most emerging and developing countries, and serving an ageing population in advanced economies. Facing limited fiscal space for raising health spending focuses policymakers’ attention on ensuring that resources are used efficiently. How sizable are the potential gains—in terms of freeing up resources and delivering better health outcomes—from improving health spending efficiency? How has efficiency evolved over the past decade? What can policymakers do to boost it? This paper estimates health spending efficiency across countries using bias-corrected data envelopment analysis and finds sizable differences in efficiency across countries, in particular among emerging and developing countries compared to advanced economies. The examination of the evolution of efficiency reveals that important efficiency gains have been made in the majority of countries. The paper also explores some of the key drivers of efficiency and finds that lower income inequality, less corruption, and health interventions oriented at expanding population access to basic health services are associated with greater efficiency.

Macroeconomics --- Economics: General --- Public Finance --- Health Policy --- National Government Expenditures and Health --- Health: General --- Analysis of Health Care Markets --- National Government Expenditures and Related Policies: General --- Aggregate Factor Income Distribution --- Economic & financial crises & disasters --- Economics of specific sectors --- Public finance & taxation --- Health economics --- Health systems & services --- Health care spending --- Expenditure --- Health --- Health care --- Expenditure efficiency --- Income --- National accounts --- Currency crises --- Informal sector --- Economics --- Expenditures, Public --- Medical care

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With limited financing options, increasing investment efficiency will be a critical avenue to building infrastructure for many countries, particularly in the context of post-pandemic recovery and rising debt emanating from higher energy costs and other pressures. Estimating investment efficiency, however, presents many methodological pitfalls. Using various methods—–stochastic frontier analysis, data envelopment analysis (DEA), and bootstrapped DEA—this paper estimates efficiency scores for a wide range of countries employing metrics of infrastructure quantity and utilization. We find that efficiency scores are relatively robust across methodologies and data used. A considerable efficiency gap exists: Removing all inefficiencies could increase infrastructure output by 55 percent overall, when averaging across 12 estimation approaches—in particular, by 45 percent for advanced economies, 54 percent for emerging countries, and 65 percent for low income countries. Infrastructure output would increase by a still-sizeable 30 percent if instead of eliminating all efficiency, countries achieved the efficiency level of their income group’s 90th percentile.

Aggregate Factor Income Distribution --- Capacity --- Capital --- Currency crises --- Economic & financial crises & disasters --- Economics of specific sectors --- Economics --- Economics: General --- Expenditure --- Financial institutions --- Financial Instruments --- Income --- Industry Studies: Transportation and Utilities: General --- Informal sector --- Infrastructure --- Institutional Investors --- Intangible Capital --- Investment & securities --- Investment --- Investments: Stocks --- Macroeconomics --- National accounts --- National Government Expenditures and Related Policies: Infrastructures --- Non-bank Financial Institutions --- Other Public Investment and Capital Stock --- Pension Funds --- Public Economics: Miscellaneous Issues: General --- Public finance & taxation --- Public Finance --- Public investment spending --- Public investments --- Saving and investment --- Stocks

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South Asia has experienced significant progress in improving human and physical capital over the past few decades. Within the region, India has become a global economic powerhouse with enormous development potential ahead. To foster human and economic development, India has shown a strong commitment to the Sustainable Development Goals (SDG) Agenda. This paper focuses on the medium-term development challenges that South Asia, and in particular India, faces to ensure substantial progress along the SDGs by 2030. We estimate the additional spending needed in critical areas of human capital (health and education) and physical capital (water and sanitation, electricity, and roads). We document progress on these five sectors for India relative to other South Asian countries and discuss implications for policy and reform.

India --- Macroeconomics --- Economics: General --- Infrastructure --- Sustainable Development --- Investments: Energy --- Demography --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- Microeconomic Analyses of Economic Development --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Housing --- Regional Development Policy --- Industry Studies: Transportation and Utilities: General --- Health: General --- Electric Utilities --- Demographic Economics: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Health economics --- Development economics & emerging economies --- Investment & securities --- Population & demography --- Health --- Sustainable Development Goals (SDG) --- Development --- Electricity --- Commodities --- Population and demographics --- Currency crises --- Informal sector --- Economics --- Saving and investment --- Sustainable development --- Electric utilities --- Population

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This note provides a technical overview and description of the 3rd edition of the IMF SDG costing tool that estimates the additional spending needs to achieve a strong performance in selected SDGs for human capital development (health and education) and physical capital development (infrastructure), in particular, water and sanitation, electricity, and roads. The 3rd edition includes data and methodological updates to, but generally remains faithful to the original approach described in, Gaspar et al. (2019). Globally, additional spending needed to achieve a strong performance in the selected SDGs in 2030 amounts to US$3.0 trillion (3.4 percent of 2030 world GDP). Estimated at 16.1 percent of 2030 LIDC GDP, the average additional SDG cost of this income group is significantly higher than in EMEs, who face additional spending amounting to 4.8 percentage points of their GDP in 2030. In contrast to EMEs and LIDCs, the additional cost for AEs is low, under 0.2 percent of their 2030 GDP.

Capacity --- Capital --- Currency crises --- Demographic Economics: General --- Demography --- Development economics & emerging economies --- Development --- Economic & financial crises & disasters --- Economic sectors --- Economics of specific sectors --- Economics --- Economics: General --- Expenditure --- Expenditures, Public --- Financial crises --- Health care spending --- Health economics --- Health --- Health: General --- Informal sector --- Infrastructure --- Intangible Capital --- Investment --- Macroeconomic Analyses of Economic Development --- Macroeconomics --- National accounts --- National Government Expenditures and Health --- National Government Expenditures and Related Policies --- Population & demography --- Population and demographics --- Population --- Public finance & taxation --- Public Finance --- Saving and investment --- Sustainable Development Goals (SDG) --- Sustainable Development --- Sustainable development