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Global Health Aid: What’s Ahead?. David de Ferranti. Outline. Health aid and its architecture: where are we headed? Will health aid do a better job of strengthening country institutional settings?. Why East Asia countries might care about what is happening in global health aid.

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  • Health aid and its architecture: where are we headed?
  • Will health aid do a better job of strengthening country institutional settings?
why east asia countries might care about what is happening in global health aid
Why East Asia countries might care aboutwhat is happening in global health aid
  • Aid and “the aid dialogue” are a source of:
    • Financial support
    • Ideas
    • Experience from other parts of the world
    • Initiatives and advocacy – on new priorities
  • And these can have implications for countries
    • Help or hinder local efforts
    • Absorptive capacity concerns
    • Fragmentation, efficiency, other
health aid has increased
Health aid has increased

… and shifting to recurrent cost financing for communicable disease control

Source: Lane and Glassman 2007

and has gotten more complicated
Official Development Assistance

Product (RED)

Debt Buy-back

Global Health Partnerships

Airline Tax

Bilateral Agencies

UN Agencies ( WHO & others)

Global Fund



Buy-downs, co-financing



Private Capital

Health Service Delivery

Public Health & Community Health

Health Financing

Individual Preventive Public Health Interventions

Data, Health Education, Environmental Health

Other Gov.

Health Strategy

Public Providers

Ministry of


Social Security




Individual Health Interventions,

Acute & Chronic Care

Private Payments

Public Providers

Private Providers

Out-of-Pocket Payments


… and has gotten more complicated!

International Philanthropy

Multilateral Banks

changes are afoot
Changes are afoot
  • The new players are still expanding. And changing.
  • Gates and other new philanthropies
  • Global Fund, GAVI, and other disease-focused initiatives
  • Others (Media stars, wealthy individuals, the BRICs, …)
  • The traditional players are trying new ideas
  • European bilaterals (DfID, France, Nordics, …)
  • US assistance (USAID, MCC, State, PEPFAR, etc.)
  • World Bank and regional multilaterals
  • BINGOs, LNGOs, FBOs, private health providers
  • Other (IMF, overall aid strategies, recipient governments)
  • The global environment is worsening
  • US economy and “the crisis from the north”
x years from now
X years from now …
  • How will today’s tensions have evolved?
  • Vertical programs vs. health systems
  • Country-driven vs. donor-driven
  • Performance-based vs. input-focused
  • General support vs. project-oriented
  • Public vs. private roles in health
  • The trans-Atlantic divide
  • How will tomorrow’s trends have unfolded?
  • Epidemics and pandemics – old and new
  • New products, technology, and financial tools
x years from now continued
X years from now … (continued)
  • Will the global health architecture have changed radically?
  • By default rather than by design?
  • Will support (public, political) for aid have weakened?
  • Impact of new generations of voters? Is a funding “cliff” coming?
  • Will the new players have achieved results?
  • Or changed the debate?
  • Or foundered on unrealistic expectations?
  • Or changed their own views of what is needed and what works?
  • Will the traditional players have changed?
  • Will aid be just IDA-type funding plus IFC-type support?
  • Will there be enough money to meet the priority needs?
the great money gap debate
The Great “Money Gap” Debate
  • UNAIDS says $55.1 bn is needed for 2006 - 2008 for HIV/AIDS
    • Funding gap: $6 bn in 2006 and $8.1 bn in 2007 1
  • GAVI: $35 bn to immunize 27 mn children by 2015
    • Funding gap: $11-15 bn 2
  • StopTB: $56.1 bn over 10 years
    • Funding gap: $30.8 bn 3
  • Maternal and Neonatal Health and Child Survival: $9 - 16 bn/yr
    • Funding gap: $5 bn/yr
  • Roll Back Malaria: $3.4 bn/yr
    • Funding gap: $2.7 bn/yr 4

1Report on the Global Aids Epidemic. Geneva: Joint United Nations Programme on HIV/AIDS, 2006.

2 Albright, Alice. "Innovative Financing for Global Health." The Brookings Institution, Washington. 26 July 2006.

Lob-Levyt, Julian. "Progress & Phase 2." 3rd GAVI Partners' Meeting, New Delhi. 8 December 2006.

3Stop TB Partnership. Actions for Life: The Global Plan to Stop TB 2006-2015. Geneva: World Health Organization, 2006.

4 WHO. "Who | Malaria". Geneva, 2006. World Health Organization. .

the great money gap debate continued
The Great “Money Gap” Debate (continued)
  • Adding it all up:
    • From World Bank for health-related MDG gap
    • $25 - 70 bn/yr (0.08 – 0.21% of global GDP)
    • From Commission on Macroeconomics and Health, WHO:
    • $40 - 52 bn/yr (0.08 – 0.12% of GDP)
    • From summing selected disease/intervention-specific estimates:

$30 - 50 bn/yr (0.10 – 0.15% of GDP)

    • From Copenhagen consensus estimate of WDR 1993 package

$337 bn/yr (1% of GDP)

the great money gap debate concluded
The Great “Money Gap” Debate (concluded)
  • $25 to $50 bn/yr is small compared to:
  • Total health spending worldwide: $3,198 bn/yr1
  • Global military spending: $1,118 bn in 20052
  • Global corporate net profits: Exxon/Mobile alone earned $36 bn in 2005
  • Total capital in global financial markets: $118,000 bn(a stock, not a flow)3
  • But large compared to:
  • Total current development aid for health: over $11.4 bn/yr (IMF/WB, 2004)
  • Total current ODA for all purposes: $80 bn/yr (OECD, 2004)
  • Total current health spending in recipient countries: $350 bn/yr1
  • And would be needed for a very long time
  • So …this is too big to solve by aid and philanthropy alone

1 Gottret, P. and George Schieber. 2006. Health Financing Revisited: A Practitioner’s Guide.

Washington, DC: IBRD/World Bank.

2 Stockholm International Peace Research Institute, 2006

3 McKinsey Global Institute, 2005

strengthening country institutional settings
Strengthening Country Institutional Settings
  • What is it?
    • Strengthening institutions such as
      • Laws and regulatory regime
      • Health workforce talent pool and incentives
      • Management systems
      • Transparency, governance
    • Similar to “enabling environment” and “investment climate” concepts in macro policy?
  • Not the same as:
    • Capacity building
    • Traditional technical assistance
prospects for improving aid effectiveness and its impact on country institutional settings
Prospects for Improving Aid EffectivenessAnd Its Impact on Country Institutional Settings
  • What to expect from the new initiatives that promote:
    • Greater strategic coherence (IHP++, etc.)
    • Harmonization and alignment (Paris, Rome, etc.)
    • Results-based aid (Norway, etc.)
    • Pooling of aid (budget support, SWAps, etc.)
    • Better use of traditional tools (e.g., technical assistance)
    • Strengthening health systems
  • And from new efforts to:
    • Strengthen incentives and institutions
    • Attack demand and supply side constraints simultaneously
why east asia countries might care about what is happening in global health aid revisited
Why East Asia countries might care aboutwhat is happening in global health aid:REVISITED
  • Aid and “the aid dialogue” are a source of:
    • Experience from other parts of the world: A LOT TO LEARN FROM NOW. MORE COMING.
    • Initiatives and advocacy – on new priorities: MANY NEW EFFORTS. THEIR VALUE STILL UNCLEAR
why east asia countries might care about what is happening in global health aid revisited continued
Why East Asia countries might care aboutwhat is happening in global health aid:REVISITED (continued)
  • And these can have implications for countries
    • Help or hinder local efforts:
    • Absorptive capacity, fragmentation, efficiency, other:
other money problems within countries
Other Money Problems Within Countries

Source: WHO National Health Accounts, updated 2002.

Global Health Spending

Global Disease Burden

Low- and Middle-Income Countries

Low- and Middle-Income Countries

High-Income Countries

High-Income Countries

Source: Gottret, P. and G. Schieber. 2006. “Health Financing Revisited.” World Bank.

volatile revenue flows
Volatile revenue flows

Average absolute percentage deviation from trend 1996-2005

US$ per capita data for 59 countries. Excludes micro states, countries where health aid < 10 percent of govt. spending. Source WHO.

Trend: Hodrick-Prescott filter; Source: Lane and Glassman 2007

options for change
Options for Change
  • Accelerate efforts to …
  • Help countries move toward stronger health systems
  • Based on more effective built-in incentives for better performance
  • Develop powerful new interventions
  • Cost-effective vaccines, programs, financing strategies, etc.
  • Improve uptake of existing interventions (new or neglected)
    • Requires focus on country health systems
  • Get more impact from
    • Success stories – from innovative country programs
    • Bridging divides between leaders and ideas
    • Evaluation of experience
  • Press key players (WB, WHO) to do better
    • New initiatives should add value
    • New initiatives should be active constituents holding main players accountable, not competitors
four inter linked initiatives
Four inter-linked initiatives
  • Project on Innovative Financing
    • IFFIm, airline tax, advance market commitment
    • Private sector: their role and investment
  • Task Force on Health Financing
    • Mary Robinson, Julio Frenk, Ngozi Okonjo, etc.
    • Within-country and aid-flow issues
  • Programs on Improving Implementation
    • Focus on governance, corruption, transparency, accountability
  • Private sector risk-pooling in Africa
    • Dutch government support
country health aid and spending volatility 96 05
Country Health Aid and Spending Volatility 96-05

Developing countries that experience high aid volatility tend to be those that are most dependent on aid and aid dependency is growing

  • High/Low Threshold: 12 percent avg. deviation from trend.

Typical health aid

dependent country

Post conflict &

other fragile states