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Health Economics Linda Davies and Gemma Shields Chapter overview Evidence is needed to inform and guide the choices that healthcare organisations make in relation to how budgets are spent. The associated costs and benefits of health treatments are key components of such decisions. An economic evaluation is a way of systematically identifying the costs and benefits of different health activities and comparing these to make an informed decision about the best course of action based on the evidence available. Economic evaluations can also be used to identify

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‘[t]he presence of social returns to knowledge investments both through positive externalities and public goods generates an economic rationale for public support for such investments’ ( Frontier Economics, 2014 : 10), such an economic rationale does not exist for investment in innovation in the aid industry, where social returns are delivered primarily overseas. Analysts have noted that ‘[i]n the absence of the profit motive it is essential to provide other incentives for individuals and

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addressed by ‘fundamental research’. 31 It was appropriate for government to make a contribution to general investigations or fundamental research as this would potentially benefit an entire sector of industry. The investigation of issues that were not broad or basic enough to be termed ‘fundamental research’ but were specific to the processes or output of one firm should not benefit from public funds. Government needed to avoid the implication that it favoured any individual company. In the first half of the 1940s, officials in the Economics

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community mutuality and gender inclusion ( Becker, 2004 ). Through such progressive reinscription, the informal sector has been repackaged through projects like ‘Bottom of the Pyramid’ economics ( Prahalad, 2006 ) or ‘inclusive capitalism’ as an eligible and eager development and business partner. Consider, for example, UNDP’s (2008) homely appraisal of NGO-assisted informality as a low-cost welfare infrastructure for an inclusive capitalism. It points out that where poverty prevails, formal rules and regulations are often less effective

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