Abstract

The Government of Nepal, through its poverty reduction strategy, has made a commitment to the reduction of inter-regional disparities in health expenditure per capita through an appropriate resource allocation formula. However, this has not yet been operationalised and there has not yet been a significant reallocation of resources in favour of poor regions.

This study examines the current system of resource allocation, focussing on recurrent funds, essential drugs and district-level systems. It identifies the areas in which it could be improved, and outlines a possible new needs-based approach to allocating resources to districts and, within districts, to facilities.