The Health Impacts of Development Effectiveness

GPEDC • 14 June 2022

Original Authors: Rohan Sweeney, Maame Esi Woode, Duncan Mortimer - Centre for Health Economics, Monash University

 

The Principles of Aid Effectiveness that were embraced in Paris (2005) and reaffirmed and expanded as the Principles of Effective Development Co-operation in Busan (2011) were designed to meet the challenges of the time. 

A lot has changed, including the rise of prominent new donors (state and private philanthropic), increasingly pressing climate crises, and a still-present global pandemic. These changes – as well as sometimes unconvincing evidence of impact – have led some to question whether the Principles are (still) fit for purpose, and others to call for a new Agenda. 

While a new Agenda could re-ignite flagging political interest and accelerate progress towards Agenda 2030 goals, it could also surrender hard-fought gains. 

As the 2022 Effective Development Co-operation Summit approaches, delegates should take note of recent evidence that show implementing the Principles have delivered wide-ranging, system-level impacts; evident in financial flows, government budgeting and in the health and welfare of populations.   

This blog summarises our research measuring the impacts of delivering health aid under the Effectiveness Principles via Sector Wide Approach (SWAp) Agreements, and considers some implications for re-visiting the Agenda. 

Health SWAps have been a prominent mechanism to operationalise Effectiveness Principles for the delivery of health aid, implemented in over 30 of the world’s poorest countries. SWAps were designed to remedy the worst failings of fragmented and duplicated project-based aid; providing a mechanism for coordinating development finance in pursuit of a government-led, sector-wide health strategy. Harmonised reporting and reliance on the recipient-government for financial management were to strengthen systems and free-up capacity.

Commitment to this ideal has waned. Most health SWAPs have seen cautious and sometimes half-hearted participant engagement, particularly amongst donors (Hill et al. 2012; McNee 2012; Peters et al. 2013). One important factor behind this, has been the lack of robust and compelling evidence demonstrating that aid delivered in line with the Principles is more effective.  

Figure 1: Pathways to Impact: Sector-Wide Approaches to Health Outcomes (adapted from Woode et al., 2021)

Some country case studies show increases in levels of health aid and improvements in service delivery and population health following health SWAp implementation (see Figure 1 for potential effect pathways). But lots of countries without a SWAP have also seen improvements in population health. How do we know that improvements in population health occurred because of SWAp implementation? 

The missing piece of the puzzle is a credible counterfactual. Recent research into the impact of health SWAps has taken great care to establish credible counterfactuals. This has allowed us, with some confidence, to identify the following causal impacts of health SWAps:

1. Health SWAps altered aid flows in ways consistent with increased control and better alignment 
From initially low levels, countries implementing a health SWAp have seen on average a 360% increase in health aid given as “general sector-support” (Sweeney & Mortimer, 2016). SWAps also facilitated reallocations of aid away from HIV and maternal/child health. Just as we would expect if – in the view of recipient governments – too much aid had been directed towards HIV and maternal/child health relative to other health priority areas.

2. In some settings Health SWAps caused some donor hesitancy 

SWAp implementation led to a nearly 30% reduction (donor flight) in health aid for the poorest implementing countries (GDP<$1/day in 1990) (Sweeney et al, 2014). These reductions may reflect a lack of confidence among development partners in the ability of poorest countries to appropriately manage less constrained health aid.

3. Health SWAps reduced ‘displacement’ of domestic government health expenditure 
‘Displacement’ of domestic government health expenditure effectively means that only $0.10 to $0.30 of every dollar of health aid stays in the health system (e.g. Dieleman et al, 2013Sweeney et al, 2018). Donors may be understandably frustrated if they aren’t getting full (health) value from their health aid investments. SWAp implementation dramatically reduces this displacement effect. For every dollar of health aid delivered to a SWAp implementing country, about $0.75 effectively stays in health (Sweeney et al, 2018). Most likely, these gains occur through contractual obligation and increased confidence in health sector financial management. 

4. Health SWAps improved infant mortality, a key indicator of population health
If the primary aim of health aid is to improve health (see Figure 1 for hypothesised pathways), our research suggests that the impact of SWAps has been overwhelmingly positive. SWAps have facilitated on average a 5-8% reduction in infant mortality (Woode et al, 2021). This same effect was seen even in the poorest implementing countries that saw reductions in health aid after implementing (Sweeney et al, 2014). Our analysis suggests a likely pathway for this effect is through reducing the significant burden that comes with fragmented aid or increasing the efficiency with which domestic resources are converted into health gains.

5. SWAps need some time to mature

Impacts on aid flows, government budgeting and population health evolve over time and (empirically) take around 4 or more years before coming to fruition.

 

Hold fast or start fresh? 

All this suggests that foundations built in Paris and Busan may be worth retaining. Some proposals for a new Agenda – better suited to the challenges of the current development landscape – appear to recognise this fact; calling on development partners to “align with national development plans” and on governments to “invest in coordination mechanisms”. Others have emphasised “knowledge-sharing and peer learning” on the path to finding better solutions to current challenges. SWAps (or SWAp-like mechanisms) would appear to have much to offer in meeting these ambitions.  

This is not to say that improvements cannot be made. The declining role of aid in development finance that typically follows transition to middle income status suggests that limiting the role of SWAp to coordination of aid may be less effective than a whole-of-finance-system to “coordinating changes in focus, volume and modalities”. SWAps or SWAP-like mechanisms may nevertheless be well-suited to whole-of-finance-system coordination. Our research demonstrates that a shared focus on government-led, national health strategy via SWAp can and has leveraged more domestic health spending. This shared focus might similarly be directed to identifying and deploying the most appropriate source of development finance to deliver on national development plans.     

There will also be value in “clarify(ing) …applicability of the current principles across …different country contexts (including in fragile states and middle-income countries)”. Our research is primarily concerned with estimating the average effects of SWAps across country-contexts. Our results do, however, identify differences (and similarities) in the impacts of SWAps by country characteristics such as GDP per capita (see Sweeney et al, 2014). The development of a more detailed SWAp database describing the breadth and depth of each country’s implementation of core SWAp components would enable a far more nuanced understanding. 

The GPEDC is making some good headway to improve data on engagement with and adherence to Effectiveness Principles. Strengthening such databases will enable more rigorous and nuanced impact evaluations.

Expanding the focus of development partnerships beyond National Governments in aid recipient countries has appeal. For example, many WASH Projects fail because they don’t sufficiently consider the local priorities of intended beneficiaries. Engaging with sub-national governments and civil society organisations can plausibly better meet local development priorities, and such Inclusive Partnerships are part of the Busan Statement. But care and coordination is needed to avoid decentralising aid-fragmentation problems. 

Finally, accelerating progress to Agenda 2030 goals might require a greater focus on individual SDGs or the specific challenges of the current development landscape. SWAp-like mechanisms might then be reimagined in pursuit of country-led agenda with respect to achievement of SDGs (rather than in pursuit of country-led agenda with respect to sector-wide goals). Despite the cross-sectoral nature of many SDGs, others have recognised the strengths of the sector-specific approach in accelerating towards achievement of the SDGs. This sector-specific approach stands at the heart of SWAps and a minor revision of the Agenda (and of the tools for its implementation) may be all that is required.   

An evidence-informed Agenda

Improving aid effectiveness at a country level is hard earned and rarely dramatic. In an increasingly austere aid environment, coordination wary or weary donors should take heart that efforts to engage with health SWAps appear worthwhile. Whilst there is an absolute need to re-ignite political engagement with Effectiveness Principles, these health aid effectiveness gains should not be ignored. Similar stories could be told in other sectors. However, effort and resources are needed to facilitate rigorous analyses on the impacts of adherence to Effectiveness Principles, both as they stand and if and as they are adapted to meet the needs of the development sector going forward. Indeed, strategy for impact analyses should also feature prominently in these discussions.