The World Health Report 2000 training of doctors often comes under the ministry of education, and there may be private investment in facilities and equipment Capital is the existing stock of productive assets. Trained health workers and mobile clinics, as well as fixed assets, are part of the capital stock of the health system. Investment is any addition to this stock of capital, such as more pharmacists or additional vehicles.The typical productive lifetime of different investments will vary from as little as 1-2 years for certain equipment to 25-30 years or more for buildings and some kinds of professionals Technological progress influences the economic lifetime of a piece of capital: old invest- ments quickly become outdated as new and improved technologies emerge. The way in which assets are managed also affects their lifetime. With proper handling and mainte nance, buildings and vehicles lose their value more slowly. Without care and maintenance, health capital deteriorates rapidly. The planning of maintenance also needs to take the physical environment into account. For example, bad roads reduce the average lifetime of vehicles; so the planning of maintenance, operation and replacement of vehicles should allow for this Human capital can be treated conceptually in the same way as physical capital, with education and training as the key investment tools to adjust the human capital stock and determine the available knowledge and skills (1). Unlike material capital, knowledge does not deteriorate with use. But, like equipment, old skills become obsolete with the advent of new technologies, and human capital needs to be maintained too. Continuing education and on-the-job training are required to keep existing skills in line with technological progress and new knowledge. Human capital is also lost through retirement and death of individuals nvestment also refers, in a broader sense, to any new programme, activity or project. Capital investment costs are all those costs that occur only once(to start up the activity), while the recurrent costs refer to the long-term financial commitment that usually follows from such an investment. If the available medical technology is seen as"capital,", and re search and development as the investment tool to expand the technology frontier and develop new ideas, these concepts may also be applied to diagnostic equipment, medicines and the like Investment is the critical activity for adjusting capital stock and creating new and pro- ductive assets. Such adjustments typically occur gradually over time. Thus, the current physi- cal infrastructure of hospital buildings and facilities in many countries is the product of ar evolution that has taken many years. Among OECD countries, expenditures for invest- ment in buildings and equipment are typically not more than 5% of total annual hea care expenditures and are usually somewhat lower than they were 15 or 20 years ago: cost control has been enforced partly by controlling additions to capital In low income countries, however, there is greater variation. Investment levels can be substantially higher than the OECD figures, especially when physical infrastructure is be ing created or restored with the help of donor agencies. Countries such as Burkina Faso, Cambodia, Kenya, Mali and Mozambique report capital expenditures of between 40% and 50%of the total public health care budget in one or more years(2). A large percentage of the remaining recurrent budget usually pays for health care staff. This means that only a small fraction of the total budget is spent on the maintenance of physical and human capi tal and on consumable inputs, including pharmaceuticals. The balance between invest- ments and other expenditures is more critical in low income countries as there is little room for mistakes. In general, however, very little is known about health investments in low ncome countries, even in the public sector. For the private sector, the available national health accounts estimates often have no data, or present implausibly high ratios of invest-76 The World Health Report 2000 training of doctors often comes under the ministry of education, and there may be private investment in facilities and equipment. Capital is the existing stock of productive assets. Trained health workers and mobile clinics, as well as fixed assets, are part of the capital stock of the health system. Investment is any addition to this stock of capital, such as more pharmacists or additional vehicles. The typical productive lifetime of different investments will vary from as little as 1–2 years for certain equipment to 25–30 years or more for buildings and some kinds of professionals. Technological progress influences the economic lifetime of a piece of capital: old invest￾ments quickly become outdated as new and improved technologies emerge. The way in which assets are managed also affects their lifetime. With proper handling and mainte￾nance, buildings and vehicles lose their value more slowly. Without care and maintenance, health capital deteriorates rapidly. The planning of maintenance also needs to take the physical environment into account. For example, bad roads reduce the average lifetime of vehicles; so the planning of maintenance, operation and replacement of vehicles should allow for this. Human capital can be treated conceptually in the same way as physical capital, with education and training as the key investment tools to adjust the human capital stock and determine the available knowledge and skills (1). Unlike material capital, knowledge does not deteriorate with use. But, like equipment, old skills become obsolete with the advent of new technologies, and human capital needs to be maintained too. Continuing education and on-the-job training are required to keep existing skills in line with technological progress and new knowledge. Human capital is also lost through retirement and death of individuals. Investment also refers, in a broader sense, to any new programme, activity or project. Capital investment costs are all those costs that occur only once (to start up the activity), while the recurrent costs refer to the long-term financial commitment that usually follows from such an investment. If the available medical technology is seen as “capital”, and re￾search and development as the investment tool to expand the technology frontier and develop new ideas, these concepts may also be applied to diagnostic equipment, medicines and the like. Investment is the critical activity for adjusting capital stock and creating new and pro￾ductive assets. Such adjustments typically occur gradually over time. Thus, the current physi￾cal infrastructure of hospital buildings and facilities in many countries is the product of an evolution that has taken many years. Among OECD countries, expenditures for invest￾ment in buildings and equipment are typically not more than 5% of total annual health care expenditures and are usually somewhat lower than they were 15 or 20 years ago: cost control has been enforced partly by controlling additions to capital. In low income countries, however, there is greater variation. Investment levels can be substantially higher than the OECD figures, especially when physical infrastructure is be￾ing created or restored with the help of donor agencies. Countries such as Burkina Faso, Cambodia, Kenya, Mali and Mozambique report capital expenditures of between 40% and 50% of the total public health care budget in one or more years (2). A large percentage of the remaining recurrent budget usually pays for health care staff. This means that only a small fraction of the total budget is spent on the maintenance of physical and human capi￾tal and on consumable inputs, including pharmaceuticals. The balance between invest￾ments and other expenditures is more critical in low income countries as there is little room for mistakes. In general, however, very little is known about health investments in low income countries, even in the public sector. For the private sector, the available national health accounts estimates often have no data, or present implausibly high ratios of invest-