The key challenge of the LaoPeople's Democratic Republic (Lao PDR) is to make fulluse of both physical and human assets to accelerate growthand improve the living standards of the population. Toachieve the country's development goals, laid out inthe sixth National Socioeconomic Development Plan (NSEDP)and the National Growth and Poverty Eradication Strategy(NGPES), improvements in public financial management andpublic expenditure policy aimed at increased efficiency,equity, and accountability - will be critical. This reportassesses the current situation and provides a way forward.The report looks at public expenditure in the agriculture,roads, education, health, and environment sectors.