from fine-tuning taxation policies and/or benefit systems to maximise welfare for the poorest households. But with the increasing availability of household survey data, he does add that this situation is fortunately gradually changing. One important observation missing from the discussion is that, from a distributional point of view, it is not sufficient to simply note, as Addison and Roe do in Chapter 1, that public spending on secondary education or health in regions like sub-Saharan Africa generally benefits the richest groups more-one has to compare pre-and post-tax income distribution to see whether public expenditure improves the pre-tax income distribution. In a region like sub-Saharan Africa, with extremely high initial income inequalities, it is almost invariably the case that public spending, even in secondary and tertiary social services, does reduce inequalities.
In Chapter 10, Reinikka and Svensson deal with one of the key issues for fiscal policy in sub-Saharan Africa-the degree of 'leakage' of funds. They document the results of a pair of disturbing surveys carried out in Uganda and Tanzania, on the extent to which public funding reaches its intended destination. In a Ugandan school survey, only 13 percent of the per student grant from the central government reached schools in 1991-1995. The rest 'disappeared' en route. The findings from the Tanzanian survey are only a little better, with only 57 percent of non-wage funds for education, and 41 percent of health funds, reaching their destination. Figures like these justify the general scepticism (however misplaced) in sub-Saharan Africa about the ability of the State to positively influence developmental outcomes. However, the authors do note that reforms implemented in Uganda have had a dramatic impact, increasing the proportion of funds reaching schools to over 80% in 1999-2000 (p. 225).
Chapter 12, by Addison, Chowdhury and Murshed, makes a very interesting observation regarding the way in which civil war in low-income countries has done great damage to state institutions, and especially tax collection. They note that this is in stark contrast to the historical experience of the now-industrialised countries-interstate wars there (particularly the Second World War) considerably strengthened the ability of the state to mobilise fiscal resources. In this context, although the focus of the book is fiscal policy in developing countries, it is a shame that the book did not include a chapter summarising the lessons to be learned from fiscal policy in the nowindustrialised countries. As one recent erudite survey has suggests (Lindert, 2004), the net national cost of government social programmes in the industrialised countries has been virtually zero; contrary to the intuition of many economists and the ideology of many politicians, social spending has contributed to, rather than inhibited, economic growth. This caveat aside, all in all an excellent collection of papers.