Allocation of development assistance for health: is the predominance of national income justified?

Gross national income (GNI) per capita is widely regarded as a key determinant of health outcomes. Major donors heavily rely on GNI per capita to allocate development assistance for health (DAH). This article questions this paradigm by analysing the determinants of health outcomes using cross-sectional data from 99 countries in 2012. We use disability-adjusted life years (Group I) per capita as our main indicator for health outcomes. We consider four primary variables: GNI per capita, institutional capacity, individual poverty and the epidemiological surroundings. Our empirical strategy has two innovations. First, we construct a health poverty line of 10.89 international-$ per day, which measures the minimum level of income an individual needs to have access to basic healthcare. Second, we take the contagious nature of communicable diseases into account, by estimating the extent to which the population health in neighbouring countries (the epidemiological surroundings) affects health outcomes. We apply a spatial two-stage least-squares model to mitigate the risks of reverse causality. Our model captures 92% of the variation in health outcomes. We emphasize four findings. First, GNI per capita is not a significant predictor of health outcomes once other factors are controlled for. Second, the poverty gap below the 10.89 health poverty line is a good measure of universal access to healthcare, as it explains 19% of deviation in health outcomes. Third, the epidemiological surroundings in which countries are embedded capture as much as 47% of deviation in health outcomes. Finally, institutional capacity explains 10% of deviation in health outcomes. Our empirical findings suggest that allocation frameworks for DAH should not only take into account national income, which remains an important indicator of countries' financial capacity, but also individual poverty, governance and epidemiological surroundings to increase impact on health outcomes.

What goes wrong with the allocation of domestic and international resources for HIV?

This paper examines how domestic and international financing for HIV is, and ought to be, distributed. We build a theoretical framework that decomposes domestic and international financing for HIV into nonlinear functions of national income, HIV prevalence, and government effectiveness. We test this model, paying particular attention to nonlinearities and to problems of bad controls, multicollinearity, and reverse causality. Finally, we use the fitted values of quartile regressions to study how much countries could reasonably pay domestically and how much they should receive from donors. Worryingly, countries with higher financial means receive on average more aid per PLHIV than very poor ones, and countries with higher HIV prevalence receive on average less aid per people living with HIV. The normative analysis concludes that US$3.08 billion of fiscal space could be created in LIC and MIC. We identify the countries that could be allocated more aid.

Financing the HIV response in sub-Saharan Africa from domestic sources: Moving beyond a normative approach.

Despite optimism about the end of AIDS, the HIV response requires sustained financing into the future. Given flat-lining international aid, countries' willingness and ability to shoulder this responsibility will be central to access to HIV care. This paper examines the potential to expand public HIV financing, and the extent to which governments have been utilising these options. We develop and compare a normative and empirical approach. First, with data from the 14 most HIV-affected countries in sub-Saharan Africa, we estimate the potential increase in public HIV financing from economic growth, increased general revenue generation, greater health and HIV prioritisation, as well as from more unconventional and innovative sources, including borrowing, health-earmarked resources, efficiency gains, and complementary non-HIV investments. We then adopt a novel empirical approach to explore which options are most likely to translate into tangible public financing, based on cross-sectional econometric analyses of 92 low and middle-income country governments' most recent HIV expenditure between 2008 and 2012. If all fiscal sources were simultaneously leveraged in the next five years, public HIV spending in these 14 countries could increase from US$3.04 to US$10.84 billion per year. This could cover resource requirements in South Africa, Botswana, Namibia, Kenya, Nigeria, Ethiopia, and Swaziland, but not even half the requirements in the remaining countries. Our empirical results suggest that, in reality, even less fiscal space could be created (a reduction by over half) and only from more conventional sources. International financing may also crowd in public financing. Most HIV-affected lower-income countries in sub-Saharan Africa will not be able to generate sufficient public resources for HIV in the medium-term, even if they take very bold measures. Considerable international financing will be required for years to come. HIV funders will need to engage with broader health and development financing to improve government revenue-raising and efficiencies.