Does international aid “crowd out” government funding for healthcare?

A striking article published in The Lancet in April 2010 concluded that when governments receive international aid for healthcare projects, their own spending gets “crowded out”, or displaced. That is, when $1 of money gets delivered from the US to help build a hospital in Ethiopia, the Ethiopian government often takes away $0.43 of its own spending on the hospital and puts that money into something else like the military. The article also indicated that this “displacement” doesn’t happen when international aid is given to non-government organizations like charities.

The implications are obvious–is aid making governments less responsible for their own healthcare systems, and should aid be redirected away from governments to private charities? This week, a new article published in PLoS Medicine questioned those conclusions–and the very premise of the original Lancet article. In today’s blog post, we take a look at the data underlying these two articles and the debate they have generated, and ask whether we should be concerned about “crowding out” issues in international health aid.

Shifts in humanitarian aid: a look at post-recession data

A few agencies have recently published their concerns that the “double dip” recession will negatively affect humanitarian aid, even as the worst famine in decades continues to hit East Africa. Have aid levels really been affected by the recession? If so, which countries are likely to feel the most impact? What factors are shaping aid decisions? In this post, we look at the latest data from the OECD’s Development Assistance Committee (DAC), the definitive source for international humanitarian aid data, and discuss the changes in aid that have transpired since the start of the 2007 recession.

The largest famine in decades hits Somalia, Sudan, Ethiopia and Kenya… why?

While US newpapers have been infatuated with hourly stock price fluctuations, the press has almost totally ignored the start of the biggest famine in decades—a humanitarian crisis larger in scale than the Japanese tsunami and Haiti’s earthquake. In this post, we take a look at the available data on the emerging famine in the Horn of Africa, and its drivers.

Displacement and discrepancies: the data on global health aid

Donations for global health programs have risen from $5.6 billion in 1990 to more than $21 billion by 2007. Most of this global health aid comes from our contributions as taxpayers to government-based aid agencies like the US Agency for International Development (USAID) and the UK Department for International Development (DFID):

Suppose we donate $1 of our taxes to a global health program. How much should we expect to actually make it into public health or healthcare services in the recipient country? If we look at the financial reports of leading non-profits like Doctors Without Borders, we see that about 85% of each donation is ultimately spent on healthcare (the rest goes to management and fundraising). But if we look at the OECD dataset describing government-based foreign aid, we find that only about 37 cents of every aid $1 given through government agencies actually makes it into the health budgets of recipient countries.

Where does the rest go? Corruption? Bureaucracy? Actually, when we look at the data, we find a strikingly different answer…

Private philanthropy and conflicts of interest in global health

Suppose an Indian businessman—a billionaire who had invested in the emerging Indian auto industry—were to donate to the Hurricane Katrina rehabilitation efforts in New Orleans. Such a donation would surely be welcomed as a grand philanthropic gesture. But if the donation carried a caveat—that to receive the funds, New Orleans’ factories would have to be redesigned to produce Tata Nano cars instead of Ford pickup trucks—the donation might produce legitimate debate.

The same situation is arising in global health politics, after the Bill & Melinda Gates Foundation established partnerships with the Coca-Cola Company.

A simple explanation of the world food price crisis

We’ve been hearing this week again about soaring food prices around the world. What’s going on? Here, we take a close look at key data on food prices and summarize the leading papers that have analyzed the problem.

A major rise in food prices occurred in 2008 and started again late last year (see the graph below):

Settling the controversy on Haiti’s cholera epidemic

While Japan’s recent earthquake and tsunami have appropriately captured the world’s attention, an earthquake that took over a year ago has continued to produce devastation in another hemisphere. Haiti’s earthquake of January 2010 shattered the country’s already-weak water and sewage infrastructure, and in October 2010, cholera (a bacterial illness spread by contaminated water) was reported in the country for the first time in more than 100 years. Within weeks, the disease had been identified in every one of Haiti’s provinces; by the end of the year, more than 150,000 cases and 3,500 deaths had been reported. Although the cholera epidemic has fallen from public view, the epidemic continues to rage on.

There’s been increasing controversy about what to do in response to the persisting epidemic. Should we distribute vaccines, even though the epidemic has already started? Are antibiotics useful, even though the classical medical textbooks say that hydration alone should be sufficient to avert death? Are clean water provisions sufficient? And, of course, how much money do we need for all of this?