in identifying cost-effective interventions and guiding resource allocations.

  • A central assumption of the WDR is that the health sector differs from other sectors, such that there is justification for a direct role for government beyond its already large, indirect influence through policies related to water supply, sanitation, education, household income, and health system regulation.

  • There are three rationales for a direct role, all related to government 's capacity to provide better outcomes in some respects than private markets can: (1) its ability to use investment in the health of the poor to reduce or alleviate poverty; (2) its ability to ensure that health interventions that are public goods, such as public health information and the control of contagious diseases, benefit everybody regardless of ability to pay; and (3) its capacity to act under circumstances of uncertainty, insurance market failure, and inequities in risks and costs.

  • Even in the poorest countries, the past 40 years have brought great improvements in the two key indicators of health statuslife expectancy and child mortalitypartly because of growing incomes and increased levels of education around the globe and partly because of government efforts to expand health services, further enriched by technologic progress.

  • Still, large problems remain: unacceptably high mortality, much of it preventable; a pace of progress that is uneven among and within countries and regions; and a growing burden of avoidable disability. There are serious new health challenges: mounting burdens of human immunodeficiency virus and AIDS and other emerging and reemerging infectious diseases; an increasing number of drug-resistant strains that cause disease; significant increases in noncommunicable diseases; violence; and continued use of health-damaging substances such as tobacco.

  • All of these will make new demands on health care systems as mortality rates decrease and populations age. Most systems now have problems that, if left unresolved, will seriously hamper efforts to address misallocations of financial resources; inequities in services; inefficiencies; and, in middle-income countries, exploding costs.

  • Thus, almost all countries confront some kind of health system reform. Such reform faces especially serious obstacles in low-income countries where, in competition for scarce national budgets, the dis

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