Measuring Government Inclusiveness: An Application to Health Policy

This paper examines the issue of government inclusiveness—i.e., the extent to which a government can be characterized as “pro-poor”—within the context of inequalities in the health sector. The paper discusses different ways of measuring government inclusiveness and argues that benefit incidence analysis comes closest to measuring the extent to which a government can be characterized as pro-poor. Using this perspective, the paper examines broad determinants of government inclusiveness, especially the role of democracy. Analysis of data indicates a positive relationship between democratization and government inclusiveness, even after controlling for additional determinants of “pro-poorness.” Ethnic heterogeneity, on the other hand, has a negative effect on government inclusiveness. Overall, the analysis suggests the importance of political freedoms for ensuring that the poor benefit from government programs. In countries with high levels of ethnic diversity, special provisions may need to be made to ensure that elite capture of government expenditure does not occur.