Programme budgeting in the health sector

The growth of the public sector has been accompanied by an increased interest in this sector among economists and non-economists alike. Much of this interest has been directed towards the overall size of the public sector, and the efficient allocation of resources within the public sector has remained comparatively neglected. This paper outlines some of the problems of resource allocation facing decision-makers in the public sector, and reviews the actual and potential uses of one decision-making tool—programme budgeting—in improving resource allocation. The health care sector is chosen to illustrate the technique of programme budgeting, the practical and conceptual problems of implementation, and the limitations as well as the possibilities offered by this approach.