Investing in Human Capital for a Resilient Recovery: The Role of Public Finance

A new World Bank report considers the role of public finance to build, protect and utilize human capital as countries seek to recover from the COVID-19 (coronavirus) crisis and lay a foundation for inclusive, resilient and sustainable development.

This Approach Paper considers the role of public finance to build, protect and utilize human capital as countries seek to recover from the COVID-19(coronavirus) crisis and lay a foundation for inclusive, resilient and sustainable development. The paper defines the problem in relation to human capital outcomes amid the COVID-19 crisis and outlines three areas for action: policy priorities, governance, and fiscal space for building and utilizing human capital. The paper highlights recent innovations and illustrates actionable steps for the short term as well as directions for the longer term, by country context, with the overarching objective of supporting a resilient recovery.

COVID-19 unleashed a global health emergency and an unprecedented economic crisis. Against the backdrop of the most severe global recession in decades, the crisis threatens to erase a decade of progress in hard won human capital gains.

Unless addressed with decisive investments, the scars of the COVID-19 shock on human capital and future productivity could become permanent.

Public finance has a critical role to play in restoring and building human capital, first as a response to the COVID crisis and second as a central element in a green, resilient, and inclusive recovery.

Partnerships are needed between staff and institutions working on human capital and public finance to ensure the adequacy and efficiency of human capital financing. This calls for a whole of government approach within countries and a renewed commitment to global partnerships.   

A new World Bank report: Investing in Human Capital for a Resilient Recovery: The Role of Public Finance highlights recent innovations and illustrates actionable steps for the short term as well as directions for the longer term, by country context, with the overarching objective of supporting a resilient recovery. […]