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The objective of this paper could be phrased as follows: What
are the health consequences of changes in public fiscal and income
policies? This is an important question, especially in times where
programmes of macroeconomic structural adjustments are being implemented
in many developing countries. The health consequences of these policies
continue to be debated. Some argue that the main victims are mainly the
poor and the vulnerable [cf. Cornia et al. (1987) and (1988)]. Others
maintain that the longer term benefits will more than compensate for
short-term losses and that the real test is to compare with the
consequences of not making the adjustments. The conceptual and empirical
foundation of the debate seems to be less than satisfactory, however. It
is our view that to understand the health consequences of such policies
a careful examination of three issues are required: (a) the existing
pattern of disease; (b) the initial distributional structure (equity
pattern) of public policies; and (c) the behavioural response of
households in allocating resources towards health-promoting activities
given (a) and (b). Our approach is necessarily context specific. It is
in line with Streeten's (1988) conclusion that ..... the most important
general lesson that emerged was that there are no general lessons, and
that each case has to be treated separately and on its merits". Our
purpose is to provide an overall general framework that serves as a
guide to examine specific cases. For more detailed theoretical analysis,
see Diop (1990), and for an empirical application, see Diop and
Sirageldin (1990).