Resource information
This paper addresses policies aimed at
closing the rural-urban gap for one of the Millennium
Development Goals (MDGs), the under-five mortality rate
(U5MR). The paper relies on the Maquette for MDG Simulations
(MAMS), a computable general equilibrium model, applied to
the database of an archetypical low-income country. The
scenarios, which focus on the period 2013-2030, include a
"business-as-usual" base scenario and policy
scenarios that analyze efforts to raise the rural population
up to the urban level in terms of health services or the
under-five mortality rate. The policy scenarios are
implemented with alternative sources of fiscal space. The
results indicate that, if current trends continue,
considerable progress for MDGs should be expected by 2030.
If the government raises rural health services, then the
decline in the rural U5MR would accelerate. If most
additional resources come from foreign grants or government
efficiency gains, then the repercussions for other
development indicators, including poverty reduction, would
be positive. However, if most additional resources are from
domestic taxes or borrowing, then progress for the rural
U5MR would come at the expense of less progress for other
indicators. Sensitivity analysis shows that these
qualitative findings are robust to different values for two
parameters related to initial rural-urban cost and service
gaps. However, quantitatively, the results depend on the
values of these two parameters, implying that individual
country characteristics strongly influence the fiscal-space
requirements for and consequences of equalizing rural-urban
MDG services and outcomes.
