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This is the sixteenth in the annual series and examines the interplay between human health, health policy and economic development. Because good health increases the economic productivity of individuals and the economic growth rate of countries, investing in health is one means of accelerating development. More important, good health is a goal in itself. During the past forty years life expectancy in the developing world has risen and child mortality has decreased, sometimes dramatically. But progress is only one side of the picture. The toll from childhood and tropical diseases remains high even as new problems - including AIDS and the diseases of aging populations - appear on the scene. And all countries are struggling with the problems of controlling health expenditures and making health care accessible to the broad population. This report examines the controversial questions surrounding health care and health policy. Its findings are based in large part on innovative research, including estimation of the global burden of disease and the cost-effectiveness of interventions. These assessments can help in setting priorities for health spending. The report advocates a threefold approach to health policy for governments in developing countries and in the formerly socialist countries. First, to foster an economic environment that will enable households to improve their own health. Policies for economic growth that ensure income gains for the poor are essential. So, too, is expanded investment in schooling, particulary for girls. Second, redirect government spending away from specialized care and toward such low-cost and highly effective activities such as immunization, programs to combat micronutrient deficiencies, and control and treatment of infectious diseases. By adopting the packages of public health measures and essential clinical care dsecribed in the report, developing countries could reduce their burden of disease by 25 percent. Third, encourage greater diversity and competition in the provision of health services by decentralizing government services, promoting competitive procurement practices, fostering greater involvement by nongovernmental and other private organizations, and regulating insurance markets. These reforms could translate into longer, healthier, and more productive lives for people around the world, and especially for the more than 1 billion poor. As in previous editions, this report includes the World Development Indicators, which give comprehensive, current data on social and economic development in more than 200 countries and territories.