News Release

Developing countries devoting more domestic spending to health, but international health aid is partly replacing, not supplementing, this spending in some settings

Peer-Reviewed Publication

The Lancet_DELETED

New research shows that overall domestic government spending on health doubled in low-income countries over 12 years to reach $18 billion in 2006—three times as much as the amount of development assistance for health the governments received from international sources. Yet in some settings, mainly countries of sub-Saharan Africa, this international aid appears to be partly replacing, not fully supplementing, domestic health budgets. The study appears in an Article Online First and in an upcoming edition of The Lancet, and is written by Professor Christopher Murray, Institute for Health Metrics and Evaluation (IHME), University Of Washington, Seattle, WA, USA, and Dr. Chunling Lu,Harvard University, Boston, MA, USA, and colleagues.

The authors did a systematic analysis of all data sources available for government expenditures on health in developing countries, including government reports and databases from both WHO and the International Monetary Fund (IMF).

The analysis showed that across all developing countries, public financing of health increased by nearly 100% (120% by IMF figures, 88% by WHO data) from 1995 to 2006. This increase was made up of rising Gross Domestic Product (GDP), slight decreases in the share of GDP spent by Government, and increases in the share of government spending on health.

"The fact that governments are committing more of their own resources to health is crucial," says Dr Murray *. "Aid from outside donors plays an important role but can fluctuate from year to year. Governments ultimately have to sustain themselves."

Difficulties with the data were encountered by the research team, which found that some countries were missing entire years of data and the information could be difficult to reconcile. Despite this, the authors indentified two clear trends. First, in countries that receive significant development assistance for health, health aid appears to be in part replacing domestic health spending, not fully supplementing it. Second, conversely, channelling health assistance through non-governmental organisations (NGOs) appears to increase government health spending.

In those countries where aid was partly replacing domestic health budgets, for every $1 spent in health aid, governments moved between 43 cents and $1.14 of their own funds to other priorities. Conversely, in countries where NGOs receive most of the aid and then apply it to projects inside the country, government health spending appears to have increased. Both trends merit further research, the authors say.

The research findings raise a number of serious questions regarding health financing. Once recipient country governments have diverted domestic health spending to other sectors in response to health aid, will this weaken health systems in the long term? If donor aid for health decreases or stops, will governments face opposition if they try to cut the budgets of other sectors or raise taxes to fill the gaps in health sector spending?

The researchers make five policy recommendations to increase transparency and accountability:

  1. The adoption of a clear set of reporting standards for government health spending as source and spending in other health-related sectors.
  2. The establishment of collaborative targets between ministries of finance, ministries of health and donors to maintain or increase the share of government expenditures going to health.
  3. Investment in developing countries' capacity to effectively absorb development assistance for health.
  4. Careful assessment of the risks and benefits of expanded development assistance for health to non-governmental sectors.
  5. Studying the use of global price subsidies or product transfers as mechanisms for development assistance for health.

The study will be unveiled April 9 at a roundtable meeting of representatives from aid organisations, governments, development banks, and research institutions at Imperial College in London.

Dr Murray concludes: "There has been a tremendous commitment around the world to improve the health of populations in the poorest countries. In order to know how well these global efforts are working, we need to be able to see clearly where the money is going and then identify best practices where these financial commitments to health are making the greatest difference in saving lives."

Lancet Editor Dr Richard Horton adds: "This work reveals the important fact that health is becoming an ever more important concern for the most impoverished countries in the world. We welcome this as good news for the billions of people with little or no access to health services. However, these findings also raise a red flag over aid effectiveness. It may be entirely rational for governments to move donor money around according to their own priorities. But the risk is that redistributing health money to other sectors may not only diminish donor confidence in aid programmes but also erode taxpayer commitment to government spending on international development."

Professor Peter Piot, Director, Institute for Global Health, Imperial College London, adds: "This important paper also shows that more critical research is needed on international development assistance to find the best balance between government budget support and working through NGOs, academia and business . Given the huge gap in health action, there is a need for multiple players, and approaches."

In an accompanying Comment, Dr Devi Sridhar and Dr Ngaire Woods, University of Oxford, UK, welcome the research but caution against concluding that international development assistance for health should be routed through NGOs rather than host governments, and give three reasons for this.

First, they point to major problems with the data, including a substantial percentage of missing data on health spending and lack of comparability between the IMF and WHO data. Second, they raise concerns that expanding assistance delivered by NGOs bypasses the domestic institutions that are meant to improve governance and sustain aid in the long-term. Finally, Sridhar and Woods highlight one of the dangers in establishing collaborative targets between donors and recipients on health budgets—one of the authors' recommendations—since such 'conditionality' could result in governments following the priorities of those international partnerships and campaigns that most successful in attracting funding, rather than the health needs of that country's people.

They conclude: "We commend Murray, Lu, and colleagues for presenting an important paper...Their evidence provokes profound questions about who, in practice, is the most accountable and effective recipient of health funding. We underscore their calls for more research into this vital question."

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For Dr Christopher Murray, please contact either William Heisel or Jill Oviatt, IHME Communications. Jill Oviatt T) +1 (206) 897-2862 /+1 (206) 861-6684 E) oviattj@uw.edu William Heisel T) +1 (206) 897-2886 / + 1 (206) 612-0739 E) wheisel@uw.edu

For Dr Devi Sridhar, University of Oxford, UK, please contact Maria Coyle, University of Oxford Press Office. T) +44 (0)1865 280534 E) press.office@admin.ox.ac.uk /devi.sridhar@politics.ox.ac.uk

For Dr Richard Horton, please contact Tony Kirby, Lancet Press Office. T) +44 (0) 20 7424 4949 E) pressoffice@lancet.com

For Professor Peter Piot, Director, Institute for Global Health, Imperial College London, please contact Laura Gallagher T) +44(0)20 7594 8432 E) l.gallagher@imperial.ac.uk

For full Article, see: http://press.thelancet.com/addtionality.pdf

For full Comment, see: http://press.thelancet.com/additcomment.pdf


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