This policy note is part of the WorldBank's Programmatic Public Expenditure Review (PER)work program for FY2012-2014. The PER consists of a seriesof fiscal policy notes, which aim at providing theGovernment of Tajikistan with recommendations to strengthenbudgetary processes and analysis. This policy note, thesecond in the series, examines public expenditures on healthin Tajikistan. After an introductory section, the notedescribes the institutional and administrative structure ofthe health sector. Section 3 presents health outcomes andhealth care utilization indicators. Section 4 describeshealth financing in Tajikistan and presents the main optionsto expand fiscal space for health. Section 5 reviews thehealth financing and organizational reforms implemented inTajikistan. Section 6 provides the main conclusions: 1)despite progress, health sector outcomes are mixed inTajikistan and utilization pattern of health services ischaracterized by significant inequalities; 2) publicspending on health is relatively low and skewed towardshospitals rather than outpatient care; 3) the hospitalsector is characterized by oversupply of beds, avoidableinpatient admissions, low occupancy rates, and excessiveaverage length of stay; 4) an increase in public healthexpenditures since 2000 was largely driven by the expandingwage bill, while other expenditures had been compressed; 5)public health expenditures show a regressive incidence, withthe distribution of inpatient care more pro-rich thanoutpatient care; 6) the large reliance on out-of-pocketproduces a high incidence of catastrophic spending; 7) anumber of health financing and organizational reforms havebeen initiated since 2000, but the scope and coverage isstill limited; and 8) the overall prospect for increasingfiscal space for health in Tajikistan are positive, withrationalization of both the overall budget and the publichealth delivery system.