Good Health Supports Good Governance

International aid is once again becoming a political flash point. Boosters say that aid can support development. Detractors argue that it instead promotes dependency and undermines good governance. The renewed battle could spell trouble for global efforts to tackle some of the biggest health problems of our time, including AIDS, tuberculosis, and malaria. It is also unnecessary: The evidence suggests we do not have to trade health for governance.

For a time, it seemed that the debate over aid was over. Focus had shifted away from whether aid was bad or good to prioritizing the types of aid that seem to be working, including key global health programs. But in December 2018, U.S. National Security Advisor John Bolton unveiled the Trump administration’s new Africa strategy. He decried a “longstanding pattern of aid without effect, assistance without accountability” and announced a shift to a “new path” for aid that would focus on securing stable and transparent governance on the continent.

Taking things a step further, in March, President Donald Trump’s budget proposal for 2020 slashed foreign aid, including for some of the world’s most effective global health programs. The multilateral Global Fund to Fight AIDS, Tuberculosis, and Malaria and a range of bilateral efforts including the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR), global health at the Centers for Disease Control and Prevention, and family planning at the U.S. Agency for International Development all came in for steep cuts. The administration said its budget would support “reducing the long-term need for foreign assistance” and support countries “to solve their own development challenges.”

Democrats and Republicans in Congress are prepared to come together to reject the cuts. Rep. Nita Lowey, a Democrat, said that the budget changes would “diminish America’s global standing.” Senate Republican leaders have also opposed them, with Senate Foreign Relations Committee Chairman James Risch criticizing cuts to programs that he believes “support the growth of healthier, more stable societies with whom we can trade.”

The Trump administration is not the only aid skeptic. In the United Kingdom, Penny Mordaunt, the international development secretary the beginning of this month, hit similar notes when she laid out the Conservatives’ vision for aid in April. To help countries “stand on their own feet and build sustainable health and education systems,” she said, the country’s Department for International Development would refocus on tackling “man-made crises” like corruption. Another faction of Conservatives, led by her replacement as development secretary, has argued that her vision misses the point of aid.

The idea that providing aid to tackle health problems such as AIDS or malaria might undermine good governance makes some intuitive sense. “We do want to be able to hold our governments accountable but we can’t do that if, actually, Oxfam is going to solve the health care problem,” Dambisa Moyo, the economist and aid pessimist, recently opined. The argument is that funding for public goods should come from citizens via taxes. When citizens have a stake in financing public goods, they’ll work to ensure that governments perform well.

There is plenty of research showing that countries that succeed in building effective health systems rely on strong governance institutions—those that distribute power, ensure transparency, check corruption, and provide strong legal systems. These same institutions are critical for economic growth and development. It would seem, then, that there is good reason to focus on building strong institutions first in order to ensure better health in the future.

But we don’t have to choose. Well-designed global health aid can have beneficial effects on governance as well.

The Global Fund to Fight AIDS, Tuberculosis, and Malaria is a clear example. The fund, widely lauded for saving millions of lives, was created in 2002 at the height of the AIDS pandemic as a health financing agency to pool contributions from wealthy nations, foundations, and the private sector.

From the start, the Global Fund worked hard to ensure that its programs would promote transparency and good governance. Before receiving money, a recipient nation must create a Country Coordinating Mechanism to oversee the funds. The mechanism is required to include representatives from government, nongovernmental organizations, community groups, and the private sector. The fund also contracts an independent professional agent in each country to conduct audits of financial and programmatic progress.

At the global level, meanwhile, each application is reviewed by an independent panel of experts, which makes recommendations to the fund’s board. And the inspector general has repeatedly identified and exposed misallocation of aid and worked through local courts and legal systems to recover it. The fund has also invested millions of dollars in programming intended to strengthen the rule of law and management of national health systems.

In a recent study, Georgetown University’s Lixue Chen and I used data from 112 countries to test whether aid from the Global Fund had any effect on governance. We found that increased aid from the fund was associated with better control of corruption, government accountability, political freedom, regulatory quality, and rule of law (the relationship with effective policy implementation was not statistically significant). This relationship held true even when we controlled for other factors that might explain the difference like a country’s wealth, relative political stability, and level of corruption at the start of funding.

We can see this kind of governance in action, for example, in Malawi, where the fund has invested over $1.3 billion. With among the highest HIV rates in the world, Malawi has made some of the fastest progress against the disease—cutting AIDS deaths and new HIV infections in half through highly effective use of donor money. At a broader level, financing from the fund has supported the growth of new NGOs that have monitored government budgets, promoted human rights, and campaigned against corruption. Recently, for example, when the government tried to transfer money budgeted for health to an organization run by the first lady to beautify Malawi, advocates found out through the transparency of the Global Fund, exposed the move to the media, and held protests in the capital leading to defunding of the AIDS commission.

Good governance doesn’t mean there is never fraud or abuse. Indeed the U.S. government recovered $2.6 billion in fiscal 2017 from health care fraud. Good governance means that there are institutions in place to respond to bad actors, effective rule of law to adjudicate disputes, and ways for people to hold their government accountable. These factors are critical not just for protecting health budgets but also for building strong economies. In Malawi, rather than undermining the ability of citizens to hold government accountable, money from the Global Fund also helped improve transparency and provided the tools to fight corruption.

Not all aid is created equal. Last year, through the Bipartisan Policy Center, two former Senate majority leaders and I collaborated on a study that showed that the PEPFAR program was associated with similar positive trends in governance. Other studies have linked more general foreign aid to poorer governance. This suggests that there may be something particularly beneficial about aid for global health. First off, health aid is targeted to need. Although the political interests of aid-sending nations play a role, health aid flows primarily to low- and middle-income countries to address specific needs. Second, the structures and processes associated with good global health work are related to improving governance, including the strong participation of activists, NGOs, and doctors. Finally, health aid is often pegged to specific program targets like getting a certain number of people access to HIV treatment or distributing a particular number of bed nets to fight malaria. These are tangible goals, visible to the population, and the focus on results can help set citizen expectations that promised public goods will, in fact, be delivered.

In this context, the Trump administration’s moves to cut aid for global health as a way to improve governance are indefensible. The Global Fund is preparing for a major donor conference to be hosted by French President Emmanuel Macron this fall. But the Trump budget proposes to cut the three-year U.S. pledge by over $1 billion—a disaster since U.S. funding is matched two-to-one by other countries. The PEPFAR program, UNICEF, and a variety of other aid programs come in for similar cuts. Of course, it is the U.S. Congress that really has the power to set U.S. funding levels, and members of Congress have voiced their intentions of ignoring Trump’s budget proposal. Nonetheless, it is worrying that the old debate over whether aid is good or bad has been reopened.

Improving health is not possible in a vacuum. We do need strong institutions. And just as the United Nations Sustainable Development Goals link improved health with improved governance, our research on the Global Fund to Fight AIDS, Tuberculosis, and Malaria shows that aid, when it flows through well-designed mechanisms, can be a key part of doing both.