Question

Why do donor countries give aid targeted to healthcare?

Answer 1

The majority of countries around the world are engaged in the foreign aid process, as donors, recipients, or, oftentimes, both. States use foreign aid as a means of pursuing foreign policy objectives. Aid can be withdrawn to create economic hardship or to destabilize an unfriendly or ideologically antagonistic regime. Or, conversely, aid can be provided to bolster and reward a friendly or compliant regime.

Although foreign aid serves several purposes, and not least among them the wish to increase human welfare, the primary reason for aid allocations or aid restrictions is to pursue foreign policy goals. Strategic and commercial interests of donor countries are the driving force behind many aid programs. Not only do target countries respond to the granting of bilateral and multilateral aid as an incentive, but also the threat of aid termination serves as an effective deterrent. Both the granting and the denial of foreign assistance can be a valuable mechanism designed to modify a recipient state’s behavior.

Donors decide which countries will receive aid, the amount of aid provided, the time frame in which aid is given, and the channel of aid delivery. The donor’s intentions and the recipient’s level of governance determine the type or sector of foreign aid. States can choose between bilateral or multilateral methods of disbursing foreign assistance in order to pursue their interests. Although bilateral disbursements allow the donor state to have complete control over the aid donation, the use of multilateral forums has its advantages. Multilateral aid is cheaper, it disperses accountability, and it is often viewed as less politically biased.

Foreign aid, once the exclusive foreign policy instrument of rich powerful states, is now being provided by middle-income countries, too. The motivation for foreign aid allocations by nontraditional donors parallels the motives of traditional Development Assistance Committee (DAC) donors. A main difference between traditional and nontraditional aid donors is that nontraditional aid donors generally do not place conditionalities on their loans.

It captures the public imagination: combating illness and disease is often the first thing people think about in any discussion of foreign aid. In recent years, aid for health has more than doubled, standing at around US$ 16.7 billion in 2006 from official and private sources. Health aid has produced tangible results, saving the lives of millions of individuals and the livelihoods of their families. The challenge now is to scale up aid to levels that will make it possible to achieve the Millennium Development Goals . For this to happen we need to show that aid for health is being used effectively, and that the challenges identified in the Paris Declaration are being addressed in ways that translate into real improvements in people’s lives.

Health is at the forefront of a growing number of new funding bodies such as the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund). This diversity and innovation is welcome, and has helped to leverage much higher levels of resources. But the large number of aid channels may also pose challenges for co-ordination and alignment with country priorities. Some developing countries are becoming dependent on individual donors, and increasingly vulnerable to any changes in their behaviour. High profile initiatives and programmes need to put more of their funding directly into countries’ own health strategies and plans, and focus on making these funds as long term and predictable as possible.

Predictability of aid flows is a crucial issue in health where so many costs are recurrent such as staff salaries and long-term drug therapies for chronic illnesses. A study by the World Health Organization of seven major health donors finds increasing evidence of commitments for health over at least five years, but says there is scope for further improvement within donors’ existing rules and regulations. The right incentives must be set for donor agency staff to commit to longer-term aid, as well as to improve their co-ordination with other agencies. The International Finance Facility for Immunisation is welcomed as an innovative development for long-term health financing.