The report reviews the substantialprogress Costa Rica made over the past decade in reducingpoverty and improving social indicators. However, whileeconomic growth certainly reduced poverty rates, thecountry's recent experience shows that relying oneconomic growth and increased public spending alone will notnecessarily yield sufficient reductions in poverty.Moreover, the rising concern that fiscal pressure will limitpossibilities of increasing social spending suggests furtherefficiency in the sector. Even though coverage of educationand health remains almost universal in basic education, andso is access to healthcare services, worrying signs insocial sector indicators suggest a decline in the efficiencyof social spending. The report addresses three key issues,namely, a) Who are the poor and vulnerable groups in CostaRica? b) What has been the impact of social spending onprograms that aim to improve the welfare of the poor? and c)Which are the improvements required, and how can governmentspending be used more effectively to reach the poor andreduce poverty? In response to these questions, the reportpresents an in-depth, multi-dimensional analysis of poverty,examines the effectiveness of government policies, andsocial sector spending on the poor, and, uses the empiricalfindings to identify options and priorities for improvingsocial sector spending and reducing poverty in the future.Recommendations emphasize improving the institutionalframework, coordinating the implementation of socialprograms, as well as increasing flexibility in programs soas to be more responsive to the needs of the poor.
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