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Learning how a variety of public financial management (PFM) improvements at each stage of the budget cycle can enhance budgetary space for health.
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The interventions and strategies contained in this paper can help health policymakers systematically link PFM reforms to budgetary space for health by supporting comprehensive country assessments and by enhancing the effectiveness of budget dialogue between finance and health authorities.
This paper discusses the concept of budgetary space for health and explores resources available for health that are generated through higher public expenditure, better budget allocations, and through improved public financial management (PFM).
- Ministries of finance play an important role in creating budgetary space for health— fiscal decisions made by finance ministries drive 70% of funding.
- Health ministries play an equally important role—effective engagement in the budgeting process can provide up to 30% of budgetary space for health, on average.
- Health policymakers should expand revenue discussions to include public financial management (PFM), paying special attention to the importance of strengthening budget allocation and execution to expand budgetary space for health.
- Strengthening PFM is arguably one of the most effective approaches to maximize existing budgetary space for health; the approach is especially critical given the revenue constraints expected in the COVID-19 era.
- Four key PFM-related interventions have been shown to enhance budgetary space for health: (i) reducing unnecessary spending by exploring flexible budget structures (ii) influencing budget allocation decisions through a results-based approach to budget negotiation; (iii) reducing unused revenues by working towards full budget execution; and (iv) shaping future allocations through good budget performance.