With thanks to co-authors of related pieces: Adrian Gheorghe, Alec Morton, Amanuel Haileselassie, Anastassia Demeshko, Jamaica Briones, Javier Guzman, Mishal Khan, Mizan Habtemichael, Ole F. Norheim, Pete Baker, Solomon Tessema Memirie, and Tesfaye Mesele.
Last year, myself and colleagues outlined a proposal for a “New Compact” to reform financing of health services in aid-recipient countries; a response to the extraordinarily complex and, at times, overreaching architecture for health aid. Multilateralism can be a powerful force for positive impact and these initiatives have achieved significant successes. However, the ad hoc proliferation of global health initiatives has become unwieldy and burdensome for recipient countries.
In last year’s paper, we identified six major issues preventing aid from being more effective, fit for the future, and aligned with country priorities: funding volatility, fragmentation, the displacement of domestic finance, ineffective prioritization, the lack of transition planning, and the lack of country ownership. Indeed, in recent years articulation of these problems and calls for radical change are easy to find, with perhaps the most important being the Lusaka Agenda and the Africa Centres for Disease Control and Prevention’s call for a New Public Health Order.
While diagnosis of the problem is relatively clear, the solutions are less so. The New Compact is our contribution to this and, in essence, comprises three things:
- Locally-led evidence-informed prioritisation
- Domestic-first resource allocation
- Consolidated supplementary aid
In other words, instead of donors cherry-picking what they want to fund and making earmarked offers, countries set priorities (with technical support where needed) and aid plays a supporting role to expand the package.
Today, CGD and collaborators release a set of five new papers that further develop the approach, covering:
Overall, we find that the New Compact has the potential to be an adaptable framework that shapes meaningful global health reforms; yields more health for the money for both domestic financing and aid; and strengthens and empowers recipient country institutions.
Feedback on the New Compact and new works
After publishing the initial policy paper last year, we received extensive feedback, most of it enthusiastic with “but what about …” questions.
In the 2023 paper, we coined the term “marginal aid”, referring to the focusing of aid on the next-most-cost-effective services, after domestic financing has covered a country’s highest priorities. In general, this term was criticised as overly technical, unclear, and missing key elements of the proposal. We’ve adopted the term “New Compact” to instead underscore a crucial missing element from the marginal aid term; the importance of an agreement for change between countries and donors.
Beyond confusion about terminology, many were positive about the approach but raised questions about challenges for implementation, particularly with respect to the link between budget planning based on evidence-informed prioritisation of services and the practicalities and complexities of public financial management systems. To better understand these issues, we collaborated with the Addis Centre for Ethics and Priority Setting (ACEPS) and the Bergen Centre for Ethics and Priority Setting (BCEPS). Building on their excellent work towards an evidence-informed prioritised health benefits package in Ethiopia, we explored what a New Compact scenario could look like in this context. We also worked with health economist Adrian Gheorge with advice from colleagues at the World Health Organization (WHO) and the World Bank, to explore Public Financial Management Considerations.
A further common query focused on opportunities for reform for a single donor. In our original paper we focused on reforms at the country level, yet achieving this may require strategic shifts by donor organisations. We worked with colleagues at the National University of Singapore to explore policy options for a single donor, in this case Gavi .
There were points about practical challenges of achieving change given the incentives and/or restrictions which determine the scope of available change for many global health actors and the role for international collaboration. We outlined an initial exploration of the global political economy drawing on the recent WHO guidance for political economy analysis for health financing reform. We also developed a CGD note on the financing of common goods, and how the rationale for who sets priorities on such goals differs from who should set priorities on the financing of country-level health services.
Perhaps the most common doubt raised was about the technical difficulty of robust evidence-informed priority-setting and whether aid-recipient countries have the appropriate capabilities to set priorities in a way that would maximise health and that donors could have confidence in getting behind. We did not do a specific piece of work on this but a recent special issue of Health Systems & Reform, drawing on many years of the international Decision Support Initiative, highlights the development of effective evidence-informed prioritisation in a very wide range of contexts, with an even more recent example coming from Liberia, hot off the press.
Lastly, and perhaps ironically, each camp of our two major stakeholders—recipient countries and donors—frequently expressed enthusiasm for the approach but doubt that the “other” group, be it donors or countries, would be so keen, while hoping that they are.
The forward look
The increasing calls for new ways of working underline the need for change. We suggest than in many contexts, a new agreement—a New Compact—could be struck between countries and donors. This agreement could serve as a solution to place country-led evidence informed priority-setting at the centre, financing the highest priority services domestically first, and focusing health aid towards cross-cutting support and a consolidated top-up package.
Real-world implementation of the New Compact has the potential to unlock significant benefits including:
- Stronger national institutions that can focus on running a health system, rather than grant applications
- More health for the money, in a time of acute budget constraints
- Greater funding security for the most cost-effective services
- Empowerment of country officials and processes to set priorities
The New Compact is an adaptable organising principle, not a one-size-fits-all panacea. It is not a quick fix or a silver bullet. It is unlikely to be implemented in full anywhere, or at all, in many contexts. Yet we do need a vision, and a framework, for what comes between the plug-the-gaps approach to much health aid in the past two decades and the ultimate goal of robust, independent health systems achieving something close to universal health coverage.
Thanks to Anastassia Demeshko, Javier Guzman, and Pete Baker for feedback on earlier drafts of this blog
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise.
CGD is a nonpartisan, independent organization and does not take institutional positions.
