History provides no evidence that global health aid is cut during economic recessions

4 Mar 2011

Paul Chinnock

Source: Bulletin of the World Health Organization (see original article or PDF)

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Citation: Stucker D, Basu S, Wang SW, McKee M (2011). Does recession reduce global health aid? Evidence from 15 high-income countries, 1975–2007. Bull World Health Organ.

One of the greatest concerns currently facing global health is that developed countries might reduce their overseas aid budgets – including development assistance for health (DAH) – as a response to the continuing global economic recession. Many richer nations have failed to meet their commitments on aid even during good times for their economies, so there is good reason to be fearful.

So far, the indications of what the future will hold for aid budgets have been mixed. Italy, which already made very limited contributions to development, has halved its aid budget since the recession began. The USA and Germany, however, have increased spending and Australia has created a Global Economic Crisis Taskforce to support recipient countries that are facing new economic problems. The UK, having reviewed its aid programme (see TropIKA.net report), has said it will continue with planned increases in its level of support.

What, if anything, can history teach about what happens to aid budgets in times of financial crisis? The question was asked by the authors of a new study published in the Bulletin of the World Health Organization, which looked for associations between the state of the economy and DAH during the period 1975–2002.

The researchers used data from the Creditor Reporting System of the Organisation for Economic Co-operation and Development (OECD) for 15 OECD countries. They indentified economic recessions on the basis of business cycles, fluctuations in per capita gross domestic product, and unemployment rates in the donor nations.

Using a modelling technique they then looked for no any statistical association between these three variables and DAH. No significant association was found in the short or long run between measures of economic recession and the amount of official DAH committed or disbursed.

The authors conclude from this finding that: “Any important decrease in overall DAH following the current economic recession would have little historical precedent and claims of inevitability would be unjustifiable”.

David Stuckler of the Harvard School of Public Health, who was the lead author of the study, said, according to a university press release: “In order to achieve a sustainable economic recovery, governments must first take care of people’s most basic health needs … Our findings remind us that there are alternative ways to finance recovery than by cutting vital health services to the world’s poorest and most vulnerable groups”.

Living with uncertainty

Those with money to invest are always advised that “past performance is not a guarantee of future results”. Nations, agencies and individuals who rely on DAH should also reflect on this maxim. When the current economic crisis first broke, many experts commented on its unique qualities with remarks to the effect that “this is new territory”, “we haven’t been here before” and so on. The response of donor nations to previous recessions may not provide a guide as to what will happen over these next few difficult years.

The uncertainty will therefore continue, despite the findings of this interesting research. And it is often uncertainty that is the biggest problem. The ability of national health programmes in recipient countries – and of global agencies such as the World Health Organization (WHO) – to plan ahead will remain much impaired until the economic crisis has truly stabilized.