<!-- Start of picture text --> Policy, Rosuoh, and Extwl AlhlN |<br><!-- End of picture text -->

Ppbln and Hiuman Resourcz WPS 545 This paper was prepared by the author when she was Chief, Population and Human Resources Operations Division, Country Department 1, Latin America and the Caribbean Regional Office. It is part of a larger effort in the Bank to set research priorities in the economic management of social programs. Copies are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Livia Mitchell, room I4-035, extension 38589 (39 pages).

This article will be published in a book of proceedings (edited by Chen, Kleinman, Potter, and Ware) of a workshop on how social science research has contributed to the health transition - - held in June 1989 at Harvard University.

Birdsall's survey of the state of research on the relations between health and economic development discusses first research on how development affects health and then research on how health affects development. Some areas covered: Research on the household-level determinants of health could aid in the design of public - programs to improve health especially in developing countries, where improving health will require changes in individual and household behavior.

Research on the demand for health careincluding the price elasticity of demand for health services and how using health services affects health- could make it easier to improve government pricing policies and design cost control mechanisms.

Work on the determinants of adult (not infant and child) health (morbidity and mortality) should be a high priority, given the epidemiological and demographic transitions going on in virtuatly all developing countries.

Better understanding of the political - economy of health especially of alternative - financing and cost control mechanisms combined with work on the detenminants of adult health, will be critical to public policy to deal with rising health care costs, through the design and efficient financing of public and private health insurance, and through greater emphasis on prevention of adult chronic and degenerative disease.

More systematic analysis of the social returns on investments in health in developing countries may be needed to support continuing increases in ever costlier health care. It is difficult to do cost-benefit analyses, partly because of the difficulty of valuing human life - and of valuing a healthy, painfree life more than a sick and painful one. But other approaches are possible, including analysis of the effects of an individual's health status on productivity (at work or school) and analysis of the social and economic costs of poor health for families and communities.

Efforts to measure the returns on investment in good health are critical in a world of scarcity, where the benefits of many worthwhile investments must be compared. And such efforts are likely to change not only our sense of how much to invest in health but our sense of how to allocate such investments.

'he PRE Worldng Paper Series dissenPinates de findings of work unded way in the Banks Policy, Research, and ExtDmal Affairs Complex .An objective of the series is to get thesefindings out quickly, even if presentations are less dlan fullypolished. 'Me findings, interpretations, and conclusions in these papers do not necessarily represent official Bank poficy.

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