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Abstract
Poverty reduction strategies often highlight public spending to improve health and
education, focusing on investments in human capital among poorer members of society.
In addition, debt relief programs such as the enhanced Highly Indebted Poor Countries
(HIPC) initiative often require increased spending on health and education in return for
debt cancellation. Mozambique's poverty reduction strategy is closely integrated with
the government expenditure program, yet up to now little is known about the extent to
which public spending is targeted toward the poor in Mozambique. This paper assesses
whether public expenditures on education and health are successful at reaching the poorer
segments of the Mozambican population. Standard nonbehavioral benefit-incidence
methodology is applied, combining individual client information from survey data with
provincial-level data on the cost of service provision. Most of the public services we are
able to measure are moderately progressive, although some of the instruments we could
not measure are probably less equally distributed. In Mozambique, it appears that
regional and gender imbalances in health and education are more significant than income-based
differences. Nevertheless, increased public expenditures on health and
education-such as that related to the HIPC initiative-are likely to have significant
poverty-reducing effects.