**PHN 1992 Sector Review**

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maintenance. The Niger Population project will strengthen departmental and district capacity in sector management, planning, monitoring and evaluation.

3.40 Both Poland and Romania will pilot tcst, with project assistance, decentralization of health sector policy making, planning, management and evaluation in three to four subregions in each of these countries, with the intention of eventually decentralizing on a country-wide basis. An interesting and innovative feature of both of these projects is that pilot subregions were chosen to participate in the projects based on a nation-wide competition initiated by those governments inviting proposals from regions/districts. All three India projects support decentralization activities: the AIDS project will strengthen central and state management capabilities; the Safe Motherhood and Child Survival project will improve management information systems, supervision, planning, logistics management and maintenance at the central, state and district levels. The Family Welfare (Urban Slums) project will improve management and administration of municipal health departments and support municipalities in the preparation and implementation of City Health Plans.

3.41 There is conventional, but unproven wisdom on the topic of decentralization. It should not be seen as a panacea. While it is likely to make services more responsive to clients, it may be, in some instances, less efficient and costeffective than more centralized services, and may also invite central governments to decentralize too rapidly financial andorganizational responsibilities to state and local governments, which are at present incapable of assuming them.

3.42 _Private Sector Development._ An important objective of the Kenya Health Rehabilitation project is to rehabilitate the Kenyatta National Hospital (KNH) to reduce its burden on the overall public budget and permit an increase in expenditures on preventive and primary health care. In support of the KNH Private Practice Plan, the Kenya project will support the rehabilitation and expansion of a private wing of that hospital and the construction of high quality office space for rental by KNH doctors for their private practices. The four objectives of this plan are to: provide KNH doctors with the opportunity to see and treat private patients on the hospital premises and thus ensure their continuous presence; run the private wing as a model institution to inspire and motivate the public sector; elevate KNH's image and reputation; and increase profit and augment KNH revenues. Over and above this initiative, KNH has become a parastatal and is thus expected to cover an increasing share of expenditures from its direct revenues. The Chile Technical Assistance and Hospital Rehabilitation project is financing a feasibility study for a private hospital project in Santiago.

# 4.b _Financial Reforms_

3.43 Financial reforms encouraged and supported under FY92 projects comprise a number of initiatives and activities that should significantly improve the quality and access of health services for the poor. They include: the mobilization of additional financial resources through cost recovery (fees for service and health insurance); increasing the social sectors' share of the public budget; reallocation of resources within social sector budgets in favor of basic services for the poor and underserved; more financial autonomy for hospitals and increased private sector activity, thus releasing public funds for basic services for the poor.

3.44 Most FY92 projects are supporting the implementation of a combination of these reforms to achieve greater efficiency and equity in the delivery of PHN services. Because of its leverage and comparative advantage in financial issues, the Bank is monitoring scrupulously project performance in this regard. Some examples of Bank involvement of this type are provided below. The government of Mauritania has developed a financing plan which provides for a gradual