RAMA V. BAKU" Structure and Utilisation of Health Services: An Inter'State Analysis The increasing cost of health care has begun to exert financial pressure on government budgets both in developed and developing countries. In the developing world the demands being placed on public health care provisioning are bound to rise significantly. However, the inability of the government to identify adequate financial resources has made health care financing an important policy concern. In the emerging debate on the subject, the World Bank has intervened with its point of view articulated in the World Development Report 1993: Investing in Health. The WDR defines the agenda for reforming the health sector in developing countries. Many of the issues it discusses are not new, and reiterate the views of the World Bank articulated since the mid eighties. Economists at the World Bank have been evolving an approach for financing health services in the context of the fiscal crisis facinig most governments since the late seventies.1 In the last two decades welfarism has suffered a world wide setback with investment in the social sectors, especially health, being viewed as "unproductive". This clearly resulted in a shift from the neo-Keynesian position that stressed the role of the government in the provision of welfare services to the philosophy of Reaganism and Thatcherism that shifted the onus of financing welfare services from the state to the individual. As a result, both developing and developed country governments cut into social welfare'expenditures as a means of dealing wi^h the fiscal crisis. With the cutback on welfare expenditure, the issue of mobilising alternate sources of finance for health care has become extremely important. The Bank believes that additional resources can be mobilised both Centre of Social Medicine and Community Health , School of Social Sciences, Jawaharlal Nehru University, New Delhi. Social Scientist, Vol. 22, Nos. 9-12, September-December 1994