Billions of dollars are flowing to developing countries to confront HIV/AIDS but relatively little is known yet about the effectiveness of this aid. CGD's HIV/AIDS Monitor initiative tracks the work of three major HIV/AIDS funders: PEPFAR, the Global Fund and the World Bank's Multi-Country AIDS Programme. CGD Program Coordinator Michael Bernstein describes the key findings from a new paper that analyzes the commitments and disbursements of these three funders.
Q: The title of your paper, "A Trickle or a Flood?", suggests that HIV/AIDS funding is either moving slowly and in small amounts, or very quickly and in large amounts - which is it?
A: Relative to the money that had been provided before 2001, it's a flood. Before the World Bank established the Multi-Country AIDS Program (MAP) in 2001, donors were committing about $1 billion per year for HIV/AIDS. By 2004, when the U.S. President's Emergency Plan for AIDS Relief (PEPFAR) and the Global Fund had also been established, these three funders alone were committing $3 billion per year. Of course, there's a difference between commitments, or promises to pay, and disbursements, which are actual transfers of funds. Even so, by 2005 funders were disbursing a total of $3.1 billion, more than three times the level of commitments before 2001.
Q: What's the most important finding in your paper?
A: The new HIV/AIDS money from these funders represents a huge increase in health aid to poor countries, especially considering it is for only one disease. In the two country cases we found that total AIDS funding by these three donors has quickly approached, or even exceeded, the countries' entire health budgets. In Ethiopia, for example, the funders provided more than $130 million for HIV/AIDS programs in 2005, $20 million more than the total government budget for health in 2003, the last year before the funders began providing large sums of money. Of course, money from these three funders and others flows into Ethiopia at different times, to different recipients, and through different mechanisms. Keeping track of all this money and using it effectively can be a real challenge for the recipients.
Q: Each year millions of people are becoming newly infected, and an estimated 70% of people who need treatment are not receiving it. What is the main barrier to faster disbursement of this money, the donors or the recipient countries?
A: A major barrier to moving money more quickly is the limited capacity in recipient countries. Many countries with large AIDS epidemics historically spent little on health, so a sudden inflow of large sums cannot be easily absorbed. Donors disbursement policies can exacerbate the problem, making it harder for recipients to manage AIDS funds. We will explore this issue at a CGD event on March 7th.
Q: What share of global HIV/AIDS donor money comes from these three big funders, and what are the major differences in how they disburse it?
A: The three funders account for well over half of total donor funding for HIV/AIDS. PEPFAR is by far the biggest. Of the $3.1 billion disbursed for AIDS by these three funders in 2005, 70% came from PEPFAR, 20% from the Global Fund, and 10% from the World Bank.
PEPFAR makes single-year funding commitments and disburses funding to many different types of recipient organizations, the majority of which are non-governmental entities. PEPFAR advances money to some of its recipients, while providing reimbursements for program expenses to others. In contrast, the Global Fund and World Bank provide multi-year commitments, disburse funding in advance of program activities, and channel funds primarily to government entities.
Q: If you could change just one thing to make the system work better, so that money for prevention and treatment is spent effectively and reaches those who need it most, what would you change?
A: I'd like to see more flexibility in the way the disbursed funding can be used. Right now, money is often narrowly focused on HIV/AIDS and donors' disbursement policies make it challenging for governments to program aid for AIDS as part of the overall health sector plan. Lots of donor funding is sent directly to non-governmental bodies, and money which flows to the public coffers often comes with requirements, such as dedicated staff or specialized bank accounts that separate donor funds from other government resources.
Since HIV/AIDS funding can be as big as the entire health budget in some recipient countries, it's no surprise that there aren't enough health workers or facilities for all the AIDS activities planned with donor money. Of course, there are other barriers to effective AIDS responses too, such as limited procurement capabilities, and weak monitoring and evaluation systems. Addressing these challenges requires major investments in all aspects of the health system. Donors would do well to allow their money to be used in concert with other health sector funding so that the entire system can be improved.