The genesis of this paper was an enquiry into the determinants of development outcomes in the social sectors, and into the role of public expenditure programmes in promoting them. The issues it sets out to elucidate are: does public expenditure work, if so how well, if not what factors adversely affect public service delivery, and how should donors respond so as best to achieve development outcomes?  The paper is not a treatise on the economics of the social sectors; it is a survey of literature and evidence on why public programmes in these sectors may yield disappointing results, and the implications of this for the development community. Its premise is that where public expenditure is ineffective in delivering social sector outcomes, the effectiveness of most forms of development assistance in these sectors is likely to be impaired; therefore donors should pay close attention to the quality of public expenditure.