This paper assesses the adequacy of the Fund’s toolkit for low-income countries (LICs), with a view to ensuring that it keeps pace with a changing world, particularly as global economic conditions deteriorate and put pressure on countries. It seeks to answer the following key questions: What are the needs of LICs in relation to Fund financing and how have they changed? How have existing instruments met LIC needs, and are there gaps or overlaps? Could changes to access rules, financing terms, or conditionality help the Fund better support LICs? What is the available concessional resource envelope and how will the changing external environment affect possible financing needs through the medium term? What scope is there to make the concessional financing framework more flexible?
Resource allocation and health financing
Employer-financed health insurance systems, like those used in the United States, distort firms labor demand and adversely affect the economy. Since such costs vary with employment rather than hours worked, firms have an incentive to increase output by increasing worker hours rather than employment. This paper constructs a heterogeneous agent general equilibrium model where individuals differ with respect to their productivity and employment opportunities. The authors generate steady state results for several alternative models for financing health insurance: one in which health insurance is financed primarily through employer contributions that vary with employment; a second where insurance is funded through a non distortionary, lump-sum tax; and a third where insurance is funded by a payroll tax. They further measure the effects of each of the alternatives on output, employment, hours worked and inequality. These findings can be compared with East and Southern African communities that employ such employer-financed health insurance systems.
Should development aid be withdrawn because it does not work? No. Under present circumstances aid resources are vital for human survival and the development of many people in Africa. Despite receiving US$38 billion in aid flows in 2008, Africa still faces a serious resource gap to bring about economic and social development and the recent near-collapse of the global financial architecture provides vital evidence that well-targeted and properly administered aid resources are vital to poor people. Africa has recently experienced one of the longest consistent economic growth rates and it has started to make a dent in reducing poverty, which needs to be built on. The debate on the demise or ineffectiveness of aid provokes serious questions about who really holds the key to redressing the injustices that exist globally.
The authors present a model of political competition, in a multi-dimensional policy space and with policy-oriented candidates, to analyse the problem of health care finance. In this model, health care is either financed publicly (by means of general taxation) or privately (by means of a co-payment). The extent of these two components (as well as the overall tax schedule in the country) is the outcome of the process of political competition. The model shows that, in equilibrium, parties propose policies that implement the latest (and most expensive) medical techniques available.
In this study, the authors argue that a better understanding of the impact of aid on both state capacity for, and elite commitment to, sustainable development has the potential to improve practices in the field of international development. This requires better empirical insight into how external funders interact with formal and informal institutions in the countries where they work, particularly in aid-dependent countries. Furthermore, it is critical to see aid as part of a spectrum of international exchange, rather than in isolation. This implies a significant research agenda, combining quantitative and in-depth qualitative analysis, as there are barriers for more informed political analysis to inform practice. Little analysis exists of how external funders, even where they do start adopting a political perspective, do influence local institutions and the people they work with. The authors review large research programmes on politics of international development, consider the role and impact of external funders’ political economy approaches, scan the literature on aid modalities, and discuss the practices of emerging external funders, particularly China.
This paper examines evolving models and experiences of domestic resource mobilisation in Zimbabwe since independence in 1980. Grounded in UNRISD’s Politics of Domestic Resource Mobilization and Social Development project, the study explores key questions around the nature and dynamics of resource bargaining over revenue mobilisation and allocation; the changes in relationships among key actors; and the forms and outcomes of institutional development surrounding resource bargaining processes. It adopts a historical approach to explore the balance of forces among actors and institutional constraints in the formulation of successive resource mobilisation strategies. Three case studies in the paper of divergent resource mobilisation innovations underscore the complexity of challenges faced by governments whose actions are shaped by uneven state capacity and policy autonomy; a weak formal sector in which established business actors wield significant power and influence; and growing contestation over legitimacy and participation by political and social actors. The Zimbabwean experience underscores the critical importance of political undercurrents and contesting interests in resource bargaining. It highlights the uneven nature of social actors’ access to and influence in bargaining processes; and of the state itself in the wake of neoliberal austerity, state capture and intra-elite competition. At the same, the author argues that the evidence from Zimbabwe points to the benefits of more transparent, inclusive and capacitated forms of revenue mobilisation involving a wider array of social actors.
Non-communicable diseases (NCDs) have been spreading fast in low and middle income countries and may also impose a substantial economic cost. One way in which NCDs might impact people’s economic well-being may be via the out-of-pocket expenditures required to cover treatment and other costs associated with suffering from an NCD. In this commentary, the authors identify and discuss the methodological challenges related to cross-country comparison of-out-of-pocket and catastrophic out-of-pocket health care expenditures, attributable to NCDs, focussing on low and middle income countries. There is evidence of substantial cost burden placed by NCDs on patients living in low and middle income countries, with most of it being heavily concentrated among low socioeconomic status groups. However, a large variation in definition of COOPE between studies prevents cross-country comparison. In addition, as most studies tend to be observational, causal inferences are often not possible. This is further complicated by the cross-sectional nature of studies, small sample sizes, and/or limited duration of follow-up of patients.
The maturity of the HIV/AIDS epidemic in South Africa has brought competing agendas for prevention and impact mitigation to the table. Given the resource constraints it is imperative that any interventions are thoroughly assessed for their efficacy, costs and benefits. The challenge to succeed with primary prevention of new infections remains the key long-term solution to the epidemic. Ensuring the availability of resources for delivering this intervention in a cost-effective and sustained manner remains a challenge. This report contributes to this by providing an assessment of the cost side of this equation. This research is part of a larger evaluation of the pilot PMTCT programme in South Africa, and has been commissioned by the Health Systems Trust on behalf of the Department of Health.
The first Millennium Development Goal - to eradicate extreme poverty and hunger - reflects the fact that undernutrition is both a symptom and a cause of poverty. In some cases, income is the main constraint to good nutrition, in some education, and in some both. Simply trying to educate the poorest families about good nutrition – a popular approach with development agencies for a long time – will not work if families do not have the money to put this knowledge into practice. Putting cash into families' hands can help to improve their diet. Save the Children UK's projects in Ethiopia show that when families are given small sums of cash, they spend it on more food and a better variety of food. It is likely that the impacts of cash transfers could be further multiplied if combined with nutrition education.
This article examines elements of a successful cash transfer program from Latin America and discusses challenges inherent in scaling-up such programs. The authors attempt a cost simulation of a cash transfer program for HIV prevention in South Africa comparing its cost and relative effectiveness – in number of HIV infections averted – against other prevention interventions. If a cash transfer program were to be taken to scale, the intervention would not have a substantial effect on decreasing the force of the epidemic in middle- and low-income countries. The integration of cash transfer programs into other sectors and linking them to a broader objective such as girls’ educational attainment is argued by the authors as one way of addressing doubts raised by the authors regarding their value for HIV prevention.