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Abstract

For policymaking, planning, and advocacy, decision-makers need to know how funding to developing countries for health improvement changed in the wake of the global financial crisis. According to IHME researchers, development assistance for health (DAH) continued to grow in 2011, but the rate of growth was low. The study, “The global financial crisis has led to a slowdown in growth of funding to improve health in many developing countries,” shows the necessity for continued measurement of DAH, especially given the international community’s focus on meeting the Millennium Development Goals by their 2015 deadline.

Coinciding with the study release, IHME published the third annual policy report on this topic, Financing Global Health 2011: Continued Growth as MDG Deadline Approaches, which provides a comprehensive view of trends in public and private financing of health assistance with preliminary estimates for health financing in the most recent years.

Research objective

While DAH increased rapidly over the last decade, its annualized rate of growth slowed following the global financial crisis. In last year's report, Financing Global Health 2010: Development Assistance for Health and Country Spending in Economic Uncertainty, IHME researchers found that funding for health in developing countries continued to rise, albeit at a slower rate, given that it was largely driven by financial contributions from governments that were committed before the recession began and that were spread over multiple years.
 
To update our figures and track DAH through 2011, researchers measured the total amount of financial and in-kind assistance from public and private channels that flowed from development organizations, or channels of assistance, to improve health in developing countries. This is part of ongoing work at IHME to help local, national, and international policymakers deploy scarce resources to best improve population health.

Research findings

The authors estimate that DAH grew by 4% each year from 2009 to 2011, reaching a total of $27.73 billion. In comparison, DAH grew by 17% between 2007 and 2008. The growth rates observed since 2009 are comparable to those observed during the 1990s. 
 
Funders have responded differently to the economic crisis. The World Bank’s International Bank for Reconstruction and Development (IBRD) has contributed substantially to the continued growth of DAH. From 2010 to 2011, DAH from IBRD rose dramatically by 128%. This increase in funding accounted for $797 million of the growth in total DAH from 2010 to 2011 and appeared to be a deliberate strategy in response to the recession to help developing countries stimulate their economies and provide social safety nets to their citizens.
 
Bilateral channels were the second-largest contributors to the total growth of DAH from 2010 to 2011, but growth slowed from 12% between 2009 and 2010 to 4% between 2010 and 2011. The slowdown is largely due to decreases in DAH by the United States. 
 
For United Nations agencies, the annualized growth rate of DAH slowed after the recession, from 6% between 2005 and 2008 to only 2% between 2008 and 2011. From 2009 to 2010, DAH from UN agencies increased by 4% but decreased by 1% between 2010 and 2011. As UN agencies’ dominance has declined, newer actors such as the GAVI Alliance and the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM) have emerged and channeled increasingly larger shares of DAH to developing countries. GAVI's annualized growth rate of DAH was estimated to be 5% between 2009 and 2010, increasing to 31% between 2010 and 2011. However, while GFATM exhibited remarkable yearly growth since its establishment, from about $16 million in 2002 to $2.91 billion in 2009, growth has slowed in the past year. Our preliminary estimates show that DAH from GFATM declined by 16% between 2010 and 2011.

Analytical approach

Researchers tracked DAH from both public and private channels such as bilateral organizations, non-governmental organizations and foundations based in the US, public-private partnerships such as GFATM and GAVI, and development banks such as the World Bank and other regional development banks.
 
The data for years 1990 to 2009 reflect disbursements of all DAH reported by public and private channels of aid. Data came from annual reports, government documents, audited financial statements, tax forms, and datasets provided by public and private donors. A major challenge in tracking DAH involves the long time lag between disbursements of funds and publication of data about these disbursements.

The numbers for years 2010 and 2011 are preliminary estimates and are based on the most current data available from sources, including budget documents and financial statements; in some cases, researchers obtained data on 2010 disbursements and estimated 2011 disbursements from correspondence with different channels of assistance.

Policy implications

The authors note that this research shows several trends that have implications for global health financing. The first is that there have been shifts in the recipients and purpose of DAH with the increased role of IBRD in DAH, as IBRD primarily provides loans to middle-income countries for health improvement and broader economic stimulus. Second is that with the slowdown of DAH from bilateral agencies in general, and in particular the US, organizations that rely on these funds, such as the US President’s Emergency Plan for AIDS Relief, are likely to be affected.

In addition, stagnation in UN funding may pose risks to several health focus areas in which these channels play an important role, including maternal and child health, noncommunicable diseases, and tuberculosis. Finally, while the newer funder GFATM has channeled large amounts to DAH over recent years, it announced that it would make no new grants for the next two years due to declines in donor funding, so DAH from GFATM may not expand as rapidly as it has in the past.
 

Given the international community’s focus on meeting the Millennium Development Goals by 2015 and persistent economic hardship in donor countries, the authors stress that continued measurement of development assistance for health is essential for policymaking.
Citation: 

Leach-Kemon K, Chou DP, Schneider MT, Tardif A, Dieleman JL, Brooks BPC, Hanlon M, Murray CJL. The global financial crisis has led to a slowdown in growth of funding to improve health in many developing countries. Health Affairs. 2012; DOI: 10.1377/hlthaff.2011.1154.