Where are the outcomes behind health aid?

The Bill and Melinda Gates Foundation have initiated a new endeavor called: Living Proof Project. Through it, they intend to show that American aid has materially improved the health of people in the developing world, and that Americans should see that their investments are working.

Prof. William Easterly's blog, AidWatch, has criticized the Gates Foundation, mainly on the grounds that its positive contentions about aid are based on WHO data showing improvements in reductions in malaria incidence rates. The Foundation uses the WHO 2008 World Malaria Report as justification and proof that aid has produced positive outcomes. Initially, before the Report was published, WHO's director for malaria programming, stated that there were significant success in a number of countries. But then his report was never finalized and its specific claims were contradicted by WHO's own September 2008 World Malaria Report, by which time the director was no longer chief WHO's chief of malaria programming. Nonetheless, the Gates Foundation continued using his positive data, and it has surfaced in its Living Proof Project.

The larger question, though, is: does health aid affect health outcomes? Over the past few years, studies by competent organizations have wrestled with this issue. In 2001, the World Bank's Development Research Group published a report showing "that the major driver on reductions in infant mortality is economic and educational: public health investments account for 5% of this decline."

In 2007, the International Monetary Fund released a policy paper on health aid and infant mortality. It found that "despite the vast empirical literature considering the effects of foreign aid on growth, there is little systematic evidence on how aid effects health, and none at all on how health aid affects health."

In 2000, the Bulletin of WHO discussed a 1997 examination of cross-national variation in child and infant mortality, finding that "95% of the differences could be explained by differences in income, income distribution, women's education, ethnicity, and religious activities."

A global health study which appeared in Social Sciences and Medicine found that "public spending on health was statistically insignificant at conventional levels and total public spending explained less than one-tenth of the observed differences."

On evaluations of health projects, it is rare to find any of them based on base line departure points and control groups. Without these, we don't know what effect, for instance, a USAID health program has vis-a-vis other donors working in the same sector in the same country, and within that, if there has been a reduction in infant mortality, what portion of that can be assigned to the public sector vis-a-vis the private sector. For instance, according to the 2007 World Health Report, in Kenya, 78% of all national health expenditures are in the private sector. When there are improvements in infant mortality or maternal mortality, where does the credit lie?

Lastly, when there are health improvements, can they really be attributed to health inputs? Beginning some 30 years ago, USAID funded a rural electrification program in Bangladesh through the U. S. National Rural Electric Cooperative Association. In 2007, a local research group in Bangladesh conducted an evaluation, using a control group (those homes not in the cooperative). The cooperative had 21 million members. The evaluation found that cooperative members' households had significant reductions in infant mortality, maternal mortality, increases in literacy, land ownership, higher educational levels, female education, and job acquisition. Although Bangladesh is one of the poorest countries in the world, it has reduced infant mortality rates by two-thirds--accompanied by an equal reduction in official aid flows.

In the form of public-private partnerships, those are living proof projects that were initiated by non-governmental organizations in which American’s can find reason for pride. Some 30 years ago, Merck started a program to combat river blindness. It donated all the therapies required in whatever amounts needed, for the needed duration, into perpetuity. Today, some 20 different public and private organizations participate in this program which has prevented blindness in tens of millions of people, main children living in Africa. A World Bank Evaluation showed that once villagers were able to return to abandoned lands, 17 million hectares were returned to agricultural production, enough to feed 25 million people.

Returning to the Gates Foundation - the goals established by the Living Proof Project are laudable. However, they need to be matched by empirical-based studies that prove information on what the Gates Foundation has set out to show the American people and the world at large.

Jeremiah Norris
Senior Fellow
Hudson Institute
Center for Science in Public Policy