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Philip Stevens: Fueling waste and corruption: U.S. aid hurts poor more than helps
01:00 AM EDT on Sunday, May 17, 2009
LONDON
PRESIDENT OBAMA signaled recently a major shift in the way the United States tries to help poor countries. Whereas the Bush presidency pushed to spend enormous sums on individual high-profile diseases such as AIDS, Obama says he will broaden U.S. aid to improve health more generally.
But the $63 billion question remains (for that is the sum proposed by Obama): Is it likely to help improve health over the long term?
Because far more people in poor countries die of preventable diseases like pneumonia than AIDS, the plan makes some sense. But, heartless as it seems, health-care programs funded by foreign aid rarely — if ever — live up to the soaring rhetoric with which they are launched by politicians.
Recent years have seen a procession of failures. A recent internal evaluation of the World Bank revealed that one third of its health programs between 1997-2007 produced “unsatisfactory” results. Furthermore, 71 percent of its AIDS projects had failed, mainly because they were too complex for local health bureaucracies to manage.
One of the biggest players in foreign aid is the Global Fund for AIDS, Tuberculosis and Malaria, established in 2002 to finance the fight against these diseases. The Fund and its supporters trumpet its successes, claiming responsibility for over 2 million people on AIDS treatment, the delivery of 70 million bed nets and 74 million malaria treatments.
But these are all measures of inputs, not outcomes. Nobody knows if malaria has been reduced as a result of these billions spent. Neither does the Fund keep track of vital AIDS patient information, such as rates of drug resistance and compliance with courses of therapy. Without such crucial data, there is no way of gauging the usefulness of its activities.
Under President Bush, the United States made great fanfare of its work on fighting AIDS in Africa with the lavishly funded PEPFAR (the President’s Emergency Plan for AIDS Relief). While this has done some positive work in financing treatment, only 22 percent of its budget is dedicated to actually preventing infections.
If PEPFAR had focused more on prevention, thousands of deaths could have been averted. Instead, the numbers of infected people pile up every year, each of whom costs thousands in palliative care until death. As the director of the U.S. National Institutes of Health, Dr. Anthony Fauci, said in 2007: “For every one person that you put in therapy, six new people get infected. So we’re losing that game.” PEPFAR must therefore be counted as a major strategic failure.
Countries such as Britain are beginning to reject the U.S. disease-centric approach to health aid and are increasingly handing over no-strings cash to health ministries in poor countries to subsidize the running costs of their health systems. As far as ideas go, this is a stinker.
While it may answer the accusation that donor governments have too much control over how money is spent locally, it is a massively profligate use of taxpayers’ money. Many health ministries are simply not up to the task of managing national health systems, let alone spending effectively the millions sprayed at them from overseas.
It’s also tantamount to inviting corruption — ranging from ministerial embezzlement to local officials selling donated drugs — which has been shown to render much development aid useless.
Study after study shows that health aid makes almost no difference to mortality rates and health outcomes, despite the expenditure of billions.
In happier economic times, indefinitely financing state health care in Africa may have imparted a warm humanitarian glow to U.S. taxpayers. Now that times are harder, and it is clear such transfers rarely work, maybe it’s time to pare them right back.
When governments become dependent on foreign sources to maintain their activities, it drives a wedge between them and their citizens and allows corrupt and repressive governments to remain in power. There are many of these in Africa.
It also discourages governments from enacting the politically difficult reforms needed to promote economic development — strengthening the rule of law, establishing property rights and opening markets. Without improving prosperity, you can’t improve health care.
Fortunately, the recession has accelerated recent declines in foreign aid. Congress still has to approve the funds so it has a chance to end subsidies to corrupt governments and begin a new chapter for the world’s poorest people.
Philip Stevens is director of policy at International Policy Network, a development think-tank based in London.
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