Economic governance

Delivering public services is vital to protect the poorest and most vulnerable people. This is especially true in times of shocks or crisis, including the current global economic crisis. As jobs and incomes are lost across the world – threatening to inflate poverty – it is even more important that nations have strong economic governance. This requires national fiscal, monetary and financial policies that determine which services are provided by the state and how they are financed.

The poorest citizens often have the least access to basic services – water, sanitation, healthcare and education. Moreover, poor and underdeveloped areas have inadequate infrastructure, which inhibits growth. For example, in the slums of Nairobi, poor people pay five to ten times more per litre of water than wealthy people living in the same city.

In some cases, public services are turned over to private enterprises. These entrepreneurs may deliver services more efficiently. However, they also increase costs and further reduce access to those who need services the most. In the least developed areas, private investment is often not available at all. Privatization, therefore, is not the whole answer. To reduce poverty and promote inclusive growth, the state needs to fulfill its critical role: providing and regulating basic services and infrastructure to all, but especially to the poor.

UNDP advocates for a stronger role for the state and public investment in delivering essential services. This includes assessing the impact of privatization and commercialization on the delivery of public services and examining how privatization has affected reaching Millennium Development Goals in poor countries. UNDP also explores options to improve the delivery of public services – how to form effective public-private partnerships, how to mobilize communities in these efforts and how governments can run these arrangements effectively.