In an economy facing fiscal constraints, public spending in the social sectors needs to be linked to outcomes to ensure efficient and equitable delivery of services.

Using primary data from the health and education ministries and household survey data from the Ghana Statistical Service, Canagarajah and Ye analyze equity and efficiency issues in public spending on health and education in Ghana in the 1990s.

Public expenditures in the education sector declined in the second half of the 1990s. Basic education enrollment has been stagnant or declining in public schools but increasing in private schools, resulting in a moderate increase in total enrollment. Regional disparities are significant, with lower public resource allocations and lower enrollment ratios in the three poorest regions. The quality of basic education in public schools remains poor, while it has steadily improved in private schools. Enrollments in higher levels are lagging behind those in basic education.

Ghana ranks high among West African countries in health indicators, although its health expenditures tend to favor the nonpoor. While more of the rural population have gained access to health services in recent years, many still have limited access or none. Moreover, there is no link between the pattern of public expenditures - especially the pattern of immunization across Ghana - and health outcomes.

To ensure that social services are efficiently and equitably delivered in a fiscally constrained economy, Canagarajah and Ye argue, public expenditures need to be linked to outcomes.