Assessment of crowding out of routine services due to COVID-19 expenditures in Nepal

This paper examines whether the response to COVID-19 had collateral damage in terms of crowding out of childhood vaccinations, other essential services, and allocations to the social sector. The conceptualization examines crowding out from a demand and supply perspective by identifying four factors that determine coverage or utilization of services: (i) availability of services, (ii) availability of equipment, (iii) demand for services, and (iv) access to services. It follows that coverage can drop if there is a demand shock (e.g., from income or fear) or access shock (e.g., from closures). The supply of services and availability of equipment were also affected along with the demand for them during the lockdown (movement restrictions, fear). However, in the most recent fiscal year for which data are available (with recovery and easing of restrictions), these factors have improved. 

This research has shown that children in Nepal were deeply affected by the COVID-19 pandemic. Some lost their lives. Far more lost their caretakers or other adult relatives. Child rights were adversely affected as the rights to education, health, protection, security, safety, and well-being were all squeezed during this time. The situation was worst among the poorer income households or those living in remote areas or belonging to certain ethnic group. The combined impact of these shocks will only unfold over time. Till then, the appropriate policy response would be to focus not only on restoring and improving vaccination coverage but to restore all the rights of all children, including the most marginalized and crowded out. The solution is not one-dimensional but would require sustained multisectoral global, regional and local cooperation to accelerate high-quality and inclusive service delivery. The time to act is now.