| Author(s) |
Dodd R
Lane C.
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| Date |
May 2010 |
| Reference |
Health Policy and Planning |
| Web Link |
 View PDF
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| Organisation |
IMF
World Health Organisation (WHO)
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| Keywords |
Global Fund, PEPFAR, World Bank, health systems strengthening, funding |
| Study Type |
Review |
| Aims |
To better understand the constraints preventing health donors from making long-term commitments of health aid. |
| Methods |
Review of practices of GAVI, Global Fund, World Bank, and four national donors (Norway, Sweden, UK, US (including PEPFAR and the Millennium Challenge Corporation - MCC) in committing long-term (i.e. beyond 5 years) development assistance funding; literature review of peer-reviewed and grey literature on aid to developing countries; Interviews with >60 agency staff. |
| Findings |
The review found increasing evidence of long-term commitments of aid for health in each of seven agencies reviewed. All partners have scope to improve the duration of aid within existing rules and regulations, but the main constraints they face are political.
- GHPs and the World Bank have the most stable funding base of all the agencies reviewed, more stable than the bilateral agencies which support them
- GHPs and the World Bank make longer-term commitments than the bilateral agencies that support them, accounting for five of the six longest commitment periods (including indicative and potential commitments).
- When looking just at firm commitments, there is less difference between bilaterals and GHPs/multilaterals, as both the USA (MCC) and the World Bank are able to commit for 5-year periods.
- While other agencies have a good record of delivering on indicative commitments (where funding is allocated but committed on an indicative basis, e.g. subject to conditions such as the availability of funds), the USA does not. US Treasury reports show that it had accumulated more than US$872 million in arrears to multilateral development banks in 2008
- GAVI Alliance has secured the strongest long-term financing arrangements of the seven agencies reviewed
- Of the agencies reviewed, only Sweden systematically tracks and reports the duration of commitments, as part of an exercise to measure internal efficiency.
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Conclusions /
Recommendations |
Recommendations
- Long-term financing for health should be a strategic objective of donors (e.g. GAVI), and by systematically reporting on duration of new projects and programmes, progress towards this can be measured
- GAVI, Global Fund and USA should follow World Bank and UKs lead and publish indicative country support plans and estimated budgets
- Donors need to make clear under what circumstances they would support long-term innovative financing mechanisms for health (to encourage greater use of such mechanisms)
- Use promissory notes instead of funding pledges (as the UK and France currently do)
- Encourage staff to make more use of already existing long-term instruments, as the UK and World Bank have done, ie stretching the normal planning horizon up to 10/12 years in specific cases
- Following GAVIs good practice, agencies with fixed-term funding (notably Global Fund) should align behind country multi-year plans and provide incentives for countries to develop such plans
- Build an exit strategy into aid commitments and make use of financial sustainability plans and cost-sharing
Conclusions
- Each of the agencies reviewed can make long-term commitments but the practice is not widespread
- While administrative hurdles are relevant, the main constraints to long-term commitments are political. Only when political circumstances are supportive are agencies able to make longer-term financing commitments for the health sector.
- While multi-year pledges are clearly preferable to annual commitments, longer-term commitments have the drawback that they lock in donors at the bottom end of a desired funding scale-up.
- Robust national health plans and financing strategies are key to changing the way aid is delivered to countries, including its duration and predictability, and agencies should encourage countries to articulate longer-term goals
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