This research shows that funding for health in developing countries has quadrupled over the past two decades – from US$5.6 billion in 1990 to US$21.8 billion in 2007. Private citizens, private foundations and non-governmental organisations are shifting the paradigm for global health aid away from governments and agencies like the World Bank and the United Nations and making up an increasingly large piece of the health assistance pie – 30% in 2007. However, health aid does not always reach either the poorest or unhealthiest countries. Overall, poor countries receive more money than countries with more resources, but there are strong anomalies. Sub-Saharan Africa receives the highest concentration of funding, but some African countries receive less aid than South American countries with lower disease burdens – like Peru and Argentina. HIV and AIDS took the lion’s share of funding, receiving at least 23 cents out of every dollar going into development assistance for health, while tuberculosis and malaria received less than a third of that.
Resource allocation and health financing
This paper notes that post-conflict countries face enormous development challenges and substantive policy consequences. It calls for appropriate responses for conflict-affected nations such as financial assistance from donors, private investment and capacity building. Arguments given for resource transfers to post-conflict countries are that by increasing income, they reduce the risk of renewed conflict and also mitigate humanitarian crises left by the conflict. The second argument assumes that the humanitarian needs of conflict countries are due to conflict. The paper outlines the political market imperfections, which make post-conflict countries vulnerable – rendering political incentives to pursue long-run development and peace weak. These imperfections should shape the goals and modalities of foreign assistance to facilitate the delivery of social services, infrastructure, and capacity-building. To achieve development goals, government officials must have incentives to pursue the broad public interest in order to reduce political market imperfections that distort decision-making and deter accountability.
The Ugandan government is investigating whether a nationwide shortage of antiretroviral (ARV) drugs led to the reported deaths of HIV-positive people in northern Uganda in July. Health workers in Apac district reported that at least 17 people known to have been HIV-positive died over the past month after failing to receive their life-prolonging medication due to supply shortfalls. Health centres around the country are reporting out-of-stock ARVs, which the health ministry attributes to a lack of funding. An estimated 170,000 people are enrolled in government ARV programmes. After a massive countrywide testing drive in January, 100,000 new HIV patients were registered, many of whom needed ARVs –government and donor funding, however, had not increased correspondingly. According to officials at the health ministry, funding delays from donors, such as PEPFAR and the Global Fund, have also contributed to national ARV shortages.
Donors have many competing claims on scarce resources, and many statistics and reporting units are vastly under resourced. Much of the core project information required is already captured within donors' central management information/financial systems. For all donors, there will still be a significant amount of information that is required by users, but not currently captured in a systematic way. It is likely that to fully comply with IATI, many donors will need to consider an investment in improving their reporting systems. This scoping paper makes a few recommendations. Further analysis should be undertaken to better understand the costs and benefits to donors of complying with the potential IATI standards, and to understand what support they may require. Agreed mechanisms should be established for updating the common standards over time and arbitrating disputes. Detailed consultations with partner countries, civil society organisations and other key stakeholders should be done to determine their priorities in terms of aid information.
The author observes that there are problems with the way in which discussions concerning South Africa’s new national health insurance (NHI) are being conducted behind closed doors. A top-down management approach is seen to be not working, excluding consultation with stakeholders, especially civil society. The challenges government and civil society now face on the issue are related to leadership and accountability (visible leadership at the highest possible level and one single voice and proposal from government), positioning and values (to what extent should principles of solidarity be applied in the design of the new system), the process followed in developing the provisions (extensive and in-depth consultation and a clearly defined process with milestones and deadlines), as well as delivery (especially in administration and management to ensure sustainable benefits).
The global fight against malaria has been continually challenged by poor access to affordable, effective medicine. Growing resistance to chloroquine, the traditional treatment, has worsened the situation. Artemisinins, the successor therapy to chloroquine, are at least ten times more costly than the older drug. In developing countries, most malaria medicines are purchased in the private sector, where traditional aid mechanisms do not reach. So a new aid approach was needed. The Affordable Medicines Facility-malaria (AMFm) will efficiently supply publicly subsidised drugs to meet public- and private-sector demand in malaria-endemic countries. If artemisinins are priced more competitively, resistance to them will be delayed.
Koos Richelle, who heads the EuropeAid Cooperation Office, the principal aid agency of the European Commission, said that, while rich nations were not about to pull the plug on donations, they were more actively monitoring whether the funds were producing desired results. The 27-nation European Union remains committed to aid, he promised, although he warned that recipients would be treated as ‘partners’, obliged to provide key improvements in terms of achieving targets set under the Millennium Development Goals. Before the crisis, rich nations simply gave away funds without making clear what results they wanted, he said. But as western countries experience financial problems, the attitude has shifted and they now demand ‘tangible results’ from development partners. ‘I see modern development cooperation not as a continuum of post-colonial hang-ups, or charity, but more as a contract. If you don't deliver, like in a normal contract, we are not supposed to pay. That is a more businesslike approach to development cooperation.’
The Department for International Development’s (DFID) new White Paper presents a shift in the way the United Kingdom (UK) delivers development aid, refocusing resources onto fragile countries and for the first time treating security and justice as a basic service alongside health, education, water and sanitation. Fifty percent of new bilateral funding will be committed to fragile countries. Key announcements include a renewed commitment to 0.7% of the UK Gross National Income (GNI) for international development (totalling £9bn per year by 2013), measures to reduce maternal mortality rates to save the lives of six million mothers and babies by 2015 and doubling of funding to £1bn for African infrastructure, including transport, energy and trade in the region. Regarding growth and trade, DFID proposes a quadrupling of funding to promote fair and ethical trade and a new International Growth Centre to offer world-class economic expertise and practical advice to poor countries.
The notable increases in funding from various donors for health over the past several years have made examining the effectiveness of aid all the more important. This study examines the extent to which donor funding for health substitutes for – rather than complements – health financing by recipient governments. It found evidence of a strong substitution effect. In fact, the proportionate decrease in government spending associated with an increase in donor funding is largest in low-income countries. The results suggest that aid needs to be structured in a way that better aligns donors’ and recipient governments’ incentives, using innovative approaches such as performance-based aid financing.
According to the European Commission’s annual report, overall spending in 2008 was 937 million euros (about US$1.302 billion) across 60 countries. Of that, about three-quarters went to the top 25 recipient non-profit agencies and an aviation contractor. United Nations (UN) agencies took 46% of the overall spend, while 44% went to non-governmental organisations (NGOs). NGOs from the UK, France and Germany account for over half of NGO funding. More than half was spent in Africa. The top five countries and territories receiving the most funding, including food aid, were (in millions of euros) Sudan (161.3), Occupied Palestinian Territories (75.1), Democratic Republic of Congo (53.9), Ethiopia (48.5) and Kenya (36.7). The top five organisational recipients were (in millions of euros) the UN World Food Programme (228), the International Committee of the Red Cross (78.9), the UN Refugee Agency (53.5), the UN Relief and Works Agency (38) and the UN Children’s Fund, UNICEF (32.6).