The Case for Aid
BY Jeffrey Sachs
I have long believed in foreign aid as one tool of economic development. This is not an easy position to maintain, especially in the United States, where public misunderstanding, politics, and ideology all tend to keep aid an object of contempt for many people. Yet the recent evidence shows that development aid, when properly designed and delivered, works, saving the lives of the poor and helping to promote economic growth. Indeed, based on this evidence, Bill and Melinda Gates released a powerful letter to the public today also underscoring the importance and efficacy of foreign aid.
As experience demonstrates, it is possible to use our reason, management know-how, technology, and learning by doing to design highly effective aid programs that save lives and promote development. This should be done in global collaboration with national and local communities, taking local circumstances into account. The evidence bears out this approach.
Of course, I do not believe that aid is the sole or main driver of economic development. I do not believe that aid is automatically effective. Nor should we condone bad governance in Africa — or in Washington, for that matter. Aid is one development tool among several; it works best in conjunction with sound economic policies, transparency, good governance, and the effective deployment of new technologies.
Professor William Easterly of New York University has long been a vocal opponent of aid, and recently declared that the aid debate was “over,” claiming victory for his theory that large-scale aid projects are doomed to fail. This blanket claim flies in the face of recent experience. Prof. Easterly has been proven wrong in both diagnosis and prescription.
During the past 13 years, the greatest breakthroughs in aid quantity and quality came from the field of public health (unlike other social sectors, such as education and sanitation, where aid increases were far less notable). As a result, the outcomes in public health in poor countries have also advanced markedly. Not only did aid quantities for public health improve; new public health institutions, such as the Global Fund to Fight AIDS, Tuberculosis, and Malaria and the Global Alliance for Vaccines and Immunization, were created to promote the effective delivery of the increased aid.
The approach of increased aid that is well targeted through innovative institutions has been enormously successful in improving public health in low-income countries. One could cite many examples ranging from the scale-up of vaccine coverage (largely through GAVI and UNICEF) to increased treatment coverage for HIV/AIDS and expanded tuberculosis control (through the Global Fund and the U.S. PEPFAR program), but I will focus specifically on malaria control, since Prof. Easterly was particularly pointed in his opposition to the mass scale-up of malaria control that has proved to be so successful. Fortunately, the global community did not heed Easterly’s erroneous advice, and followed a path that the public health community strongly advocated.
At the turn of the new century, malaria was front and center of the global aid debate. Research by myself and others, and evidence garnered in the report of the World Health Organization (WHO) Commission on Macroeconomics and Health that I had the honor to chair, showed that in addition to being a health catastrophe, malaria imposes a significant economic burden, particularly in sub-Saharan Africa. Luckily, though, the world was starting to take notice. In 2000, the U.N. Millennium Declaration, The African Summit on Malaria, and the G8 Declaration all addressed the burden of malaria and committed the world to action. The debate soon turned to the issue of policy: how could the malaria burden be reduced?
Here we must look at some key details in order to keep aid in careful perspective. Starting in the late 1990s, malariologists at WHO, in academia, and in various government agencies around the world, described how malaria control could be made highly effective. The malariologists emphasized the ability of insecticide-treated bed nets to reduce the transmission of the disease. They also emphasized the urgency of shifting to a new generation of first-line medicines, notably those using artemisinin (a powerful anti-malaria drug developed by Chinese scientists) in combination with other medicines, because the old-line medicines (mainly chloroquine) were losing efficacy to growing drug resistance. The combination of bed nets and effective medicines (known in the jargon as “vector control” and “case management” respectively), supported by rapid diagnosis of infections, makes for a powerful one-two punch in saving lives and reducing malaria transmission.
Indeed, epidemiological theory and practical experience strongly suggested that if bed net coverage could be raised to a sufficiently high rate (typically around three-quarters, depending on local conditions), the transmission of malaria would be sharply reduced even for those not directly protected by their own bed nets. The “spillover” of protection to the non-users is called a mass-action effect, similar to the way that high vaccine coverage protects even unvaccinated people because the disease stops spreading when fewer people are susceptible to infection. This mass-action phenomenon of course strongly argued for a malaria control strategy that would lead to a high level of bed net coverage.
There was one more detail of great policy significance: Not all bed nets are equal. The high-quality bed nets work not only mechanically (by covering the body) but also chemically, by a treatment with insecticide that repels or kills mosquitoes that land on the bed net. A bed net without insecticide treatment is far less effective than a treated net. Until the early 2000s, bed nets required frequent retreatment with insecticide (e.g. by bathing the nets in tubs filled with insecticide) in order to remain effective. Then, Sumitomo Chemical developed long-lasting insecticide-treated nets (LLINs) that were specially engineered to keep the insecticide intact even when the nets were repeatedly washed. The new nets could therefore remain effective for around five years or even more. Other companies, such as Vestergaard and BASF, also developed their own varieties of LLINs. This was a great breakthrough, but the new nets were more expensive to manufacture than the preceding generation of simpler nets. (In the photo above, South Sudanese children are taught how to use LLINs.)
All of these developments — new nets, new medicines, improved diagnostics, and a surging epidemic — were crucial to developing a successful malaria control policy after the year 2000. Taken together, they motivated the case for increased donor aid to support the mass free-distribution of LLINs and free access to the new generation of artemisinin-based medicines and rapid diagnostic tools. Without financial support, poor people could not afford either the LLINs or the new medicines. Attempts to sell the nets at a discount, known as social marketing, had very little take up, since many poor families simply lacked any cash income at all. The prospect of achieving “mass action” protection through social marketing was very small. Moreover, impoverished households would often scrape together the needed money only to buy the cheaper but ineffective nets, rather than the more expensive but more effective LLINs.
Governments of low-income African countries needed donor support for the scale-up effort since their own domestic tax revenues, even when amply allocated to public health, could not cover the costs of a basic primary health system including scaled-up malaria control. The financial calculations, laid out by the Commission on Macroeconomics and Health, showed that an impoverished country with a GDP of around $500 per capita, typical for a poor country in Africa, may be able to muster around $15 per person per year out of domestic revenues for primary health (directing 15 percent of domestic revenues to health, as the Abuja target for health spending recommends), while the costs of a basic public health system (measured in 2014 dollars) would be around $50-$60 per person per year.
Prof. Easterly would have none of it. He took special and early aim at these recommendations in his 2006 book The White Man’s Burden, claiming that free nets “are often diverted to the black market, become out of stock in health clinics, or wind up being used as fishing nets or wedding veils.” After this specious claim, he then went on to write that “a study of a program to hand out free [malaria bed] nets in Zambia to people … found that 70 percent of the recipients didn’t use the nets.” Yet this particular study, which was conducted by the American Red Cross and CORE, actually showed the program was a success, with high rates of net adoption. Prof. Easterly’s claim misconstrued this and other evidence being developed by the ARC and others about the mass distribution of nets, which had found that the free distribution of malaria bed nets was achieving high coverage and adoption rates….continues