IT is a common assertion that increasing the health and education sector budget allocations would increase the quality and scope of service delivery in these sectors. This, I think, is a popular misconception. It is not applicable to all situations and countries.

I think for this concept to hold true it is necessary that some minimum prerequisites are met. The common ones are that the public sector has the capacity to manage these sectors efficiently and cost-effectively.

Some of these requirements can, in fact, be met by increasing the allocation itself and, therefore, this leads to a circular situation. Many financing organisations like the World Bank assume that increasing the budget allocations in these sectors would lead to increased capacity and efficiency and insist that these allocations be increased and allocate substantial financing for these sectors.

However, the assertion here is that in corrupt governments the amount of resources that finally trickles down to the end-user are only a very small fraction of the total allocation. The rest is lost to leakages due to corruption.

The percentages of leakages could be very high. This means that increasing the budget allocations in these sectors in such countries will only result in increased opportunities for corruption and loss of resources unless the service delivery mechanism is changed.

To cite an example, Indus Hospital in Karachi, a fully-funded charitable 150-bed facility financed through donations, which I visited recently, operates on an annual operating budget of $10 million annually and has been set up at a capital cost of approximately $50 million.

It delivers world-class health service facilities to about 1,500 patients a day free of cost. There are several other facilities such as this operated by NGOs in Pakistan.

In fact, in some government hospitals, such as the Civil Hospital in Karachi, NGOs operate key facilities such as an operation theatre complex, through donations, very efficiently, while other facilities in the same hospital are in a dire state.

I understand that the health sector budget allocations for a mid-sized district in Pakistan are much more than the amount spent by Indus Hospital with very little to speak of in terms of service delivery. Most of the budget allocations are lost to corruption.

In the education sector also, several NGOs operate good quality schools in the country that provide quality education. The government builds schools that are frequently used to house cattle by zamindars and waderas and suffer from perpetual shortages of teachers and other basic facilities. Various TV programmes in Pakistan say this repeatedly.

The answer to this conundrum could be that the service delivery mechanism needs to be changed. We observe that when funds are put at the disposal of NGOs with a good record, one achieves good results.

Perhaps, the people of Pakistan should insist that (a) for facilities run from budget funds, the government outsource the service delivery to NGOs with a good track record which have the credibility to manage and operate such types of facilities. This concept is being tried out for some facilities operated by the social security administration in Iran.

International financing organisations should develop mechanisms to allocate funds directly to such NGOs instead of putting them at the disposal of governments.

In both cases, the government and civil society together can set up mechanisms to ensure that the service delivery is up to standard.

These ideas can be fleshed out more in a subsequent piece if there is some traction in society to develop these ideas.

ALI HASHIMFairfax, USA