Nov

5

2024

VIRTUAL
10:00—11:00 AM ET | 3:00—4:00 PM GMT

Reforming Development Assistance For Health: Is a True Partnership Possible?

Speakers

Mercy Mwangangi, Director of Health Systems Strengthening, Amref Health Africa; Co-Chair, Future of Global Health Initiatives

Anders Nordström, Advisor and Former Ambassador for Global Health, Sweden 

Kalipso Chalkidou, Director Health Finance and Economics, World Health Organization 

Moritz Piatti, Senior Economist, Public Finance and Service Delivery at World Bank Group  

Moderator

Pete Baker, Deputy Director, Global Health Policy Program and Policy Fellow, CGD

Development assistance for health (DAH) is facing a crisis. Notable challenges of DAH include its role in fragmenting health systems, its focus on donor priorities rather than domestic government priorities, its lack of exit strategy, and its risk of displacing domestic investment in health. These challenges are well known but the array of potential solutions do not, as of yet, have widespread support.

Proposed solutions include incremental change such as better coordination of the large global health initiatives proposed recently in the Lusaka Agenda; to more structural changes, such as CGD’s proposal for a New Compact between donors and governments on financing health systems, more budget support, or even the sunsetting of aid.

In this event, we will discuss the proposed solutions, whether they can work together, the implications for countries and donors, and how to make progress on them.

This event is part of a CGD series on reform of the global health architecture.

Pete Baker: Welcome, everyone, to the Center for Global Development event on Reforming Development Systems for Health. My name is Pete Baker. I'm the deputy director of the Health Program here at CGD. I think we're all here today because we recognize that development systems for health is entered into a period of prolonged crisis. Perhaps what's worse is that there's no common consensus on what the future solutions may be.

Perhaps this is for three reasons. Firstly, overall, there's falling aid budgets. Underlying this, perhaps, is a reduction in economic performance in many of the donor countries, but also a reduced confidence in the purpose and ability of aid to improve lives. This can be seen, perhaps, most strongly in the UK, but also in countries like Germany that have been cutting their aid budgets in recent times.

Secondly, within the aid budget, there's been many competing alternative priorities to health. I'm thinking here of climate change, but also of geopolitical conflict, wars in the Middle East, and wars even in Europe. Thirdly, there's been a perspective in a range of donor countries, but also in recipient countries, that development systems for health is not suited, perhaps, to the health challenges of today. Too often, people argue it fragments and undermines health systems, and it disempowers the very decision makers that are tasked in countries with leading their health systems.

For many similar reasons, perhaps, domestic financing for health in low- and middle-income countries is also facing challenges. It's a weak economy, many countries are facing high debt repayments, and there's no sign of the kind of increase in prioritization for health that would be needed to counter this. In the end, it is this domestic financing for health that's really the main driver of health around the world.

This combination, weak development systems for health, weak domestic expenditure on health, but also pressure on the global health architecture for reform, really undermines that we've entered in a new phase in global health. We can no longer call it the golden era of global health. Perhaps more positively, it opens up new opportunities for new ways of thinking about how aid and domestic financing health can come together in new partnerships and new modalities to work together to improve health because in the end, that is where the solution lies. No common solution has been agreed amongst donors and recipients, and no solution commands broad support.

This topic has become something of an obsession at CGD. Today, you will notice that we've released a blog called A Time to Change, which summarises over 20 different blogs and publications that CGD authors have written on the topic of reforming development systems for health. I encourage you to go take a look at that page. You can find it in the notes for this meeting, but also if you just Google it online on the CGD website.

Particularly, what might interest people is something called The New Compact. There's a series of papers we produced here about a new way of donors and countries working together that's both empowering but also improves value for money. So I'm delighted that we have a stellar panel here today to discuss The New Compact, to discuss the challenges with aid, and discuss other solutions for how it can be reformed in the future. Let me now introduce the panel.

We have Mercy, the director of health system strengthening at AMREF Health Africa. We have the former, sorry, who is also the former chief administrative secretary for the Ministry of Health of Kenya. We have Anders, who is a senior advisor at Dahlberg and formerly the Swedish ambassador for global health. We have Kalipso, the director for health, financing, and economics at the World Health Organization. And we have Moritz, the senior economist, public finance and service delivery at the World Bank. This panel will discuss the topic for 30 minutes, and then we'll have plenty of time to hear from you through questions and answers from the audience. There is a link to send in your questions via Slido in the YouTube chat and in the event web page. If you use Twitter as well, we'd encourage you to tweet or use the X app with the hashtag CGTalks and tagging @ C-G-D-E-V, CGDEV.

Let's get started with the discussion, everyone. Mercy, if you don't mind, I'd like to start with you, just with a kind of open question if that's okay with you. From your perspective and your expertise, what are the most important challenges you see with the development system for health and how it partners with domestic governments? What should we be focusing on today?

Mercy Mwangangi: Thanks. Thanks, Pete. I'd like to appreciate CGD for setting this up and for the panelists for really contributing to this discussion. That's a big question, Pete, and it's a huge question that would take hours. But I think I need to start from a point of appreciation and recognizing that we have had good impact from GHI investments. If we look all the way back to the MDG eras and what we were trying to mitigate against, some of the progress that has taken place particularly when it comes to strategic programs like HIV, TB, and malaria in sub-Saharan Africa, a lot of these are attributable to the joint investments that GHIs have had with the various countries.

There's something that should be recognized and applauded and not forgotten, even as we have this discussion. I think then looking at the other side of the coin, flipping the page on this, I think the world and countries, continents, be it investors or so-called donor countries and implementing countries, have reached a point where it becomes really important to ask ourselves, "Are we maximizing impact?" If we look at all the pennies, dollars that are in the basket, are we getting the best buy? Are we seeing the outcomes that we should see for the investments that we have?

If I could reflect on my own experience in Kenya where I've served in government close to 15 years, and recently, most recently as deputy minister of health, we struggled with being able to meet the imperatives of Kenya's UHC ambitions. The struggle was multi-pronged. If I could focus on the area of the resources and the resource requirements, I do remember having conversations with the political class as well as technical teams. How do we ensure that development assistance to Kenya is geared towards the government's objectives for UHC?How do we sit around the table and negotiate with the different GHIs and ensure that they're able to support and align their support towards the goals that we had at the time as government? I can tell you those conversations haven't been easy. The conversations, while appreciated even by GHIs who actually have appreciated the need of maximizing impact and optimizing resources, it was clear that there were constraints in doing this. Some of these constraints have been governance constraints, bureaucratic constraints, constraints when it comes to even the simplicity of grant-making processes.

I do remember distinctly when it was Global Fund time, then everyone diverted their attentions towards applying for those grants. When it was time for Gavi and all the other processes that come with that, we all diverted our attention to be able to support that grant-making process. This goes on and on, not just for the, should I say, the visible and mature GHIs, but also for all other funders who come into the country and are engaging with government, including bilaterals and multilaterals and development banks. It's the same, same process.

I can tell you this came at an opportunity cost of a lot of the work that the technical teams would be doing. If we look at perhaps unpacking of UHC and the UHC goals that we have, you will realize if we peel through the data and look at a lot of the impact reporting, a lot of discordance between the different measures of progress and outcomes amongst the different GHIs. This has had an influence when it comes to country systems and how countries define their M&E processes, how countries are able to even make decisions. It's very easy to overlook the multiple influences and voices that come in when it comes to being able to compute measures of impact on the investments that we have.

I think also it's important to note that increasingly, it's becoming very clear that we do need to ensure that we have sub-Saharan Africa, South Asia voices in the GHI processes of governance in the boards, in the technical committees. There are times where I've sat in the past as a nominee or a delegate of the minister, and sitting in some type of GHI and needing to represent the voices of 30 other ministers. It's absolutely impossible. Particularly when that mechanism is not funded and supported, how do we then have this one delegate or nominee represent a whole continent and be able to filter in the measures that are required by the different countries who are who are in partnership with GHIs?

I must say, again, looking at the glass half full, a lot of interventions have been put in place. I'm very interested in The New Compact. I have read all the 20 blogs, and I think you're right, it is an obsession of CGD. I was quite surprised that there's so much content out there from your platform on this. I realized then, therefore, there are changes and there is positive traction and movement.

But I think for me, some of the key things that remain can be sort of packeted into five areas. Are we still all focused on UHC? Are we focusing on primary healthcare? Are we meeting the equity imperative of investments? Here in Kenya, you'll notice, while we may look at some of the aggregate data in terms of impact at a country level, huge inequities exist within the country in the different sub-national entities in the country. How can GHIs work with government to support this?

If we look at the issue of domestic resource mobilization, I was trying to remember 15 years ago when I just became an intern from my medical school training, Kenya had about 46% of its total health expenditure coming from external support. The number has been dwindled to around 29%. But then again, looking at those statistics and unpacking them, you realize the fungibility of money. This has led to perhaps an increase in out-of-pocket expenditure and a disinvestment by government in some key areas where government should be investing. So again, we do need to look at that.

If we then also ask ourselves, are GHIs being the best in setting up the best foot in terms of their coherence of operation? Are there improvements that can be done when it comes to cross-board collaboration? Could we probably have some form of common measures and matrices when it comes to health system strengthening? All these are elements that I think we could do better in if we all came together and collaborated. Like you rightly said, everybody knows what the problem is. I think we even know what the solutions are. I just think it's this middle black box of how to get there that seems to be a bit unclear. I think I'll continue sharing more of my thoughts as we continue with this discussion. Back to you, Pete.

Pete Baker: Thanks, Mercy. Fascinating. I'm glad someone is reading the 20 blogs. We're delighted that you're on board. Anders, I'd love to hear your perspective on the same question, if that's okay. What do you see-- Obviously, there's lots of challenges that Mercy's just highlighted. I guess, what do you see as the priorities? What do you see as the biggest problems right now with the development systems for health? Over to you.

Anders Nordstrom: Thank you, Pete. Thank you for organizing this. I think the biggest problem is that we are focusing too much on development assistance. I think it's time to move on. If we look at health and what we see, what is happening to health across the world, I've been working on this for 30 years. I came to Kenya first time also 30 years ago. The relative role of development assistance have changed quite dramatically in the world. It's still useful, it's still important, but in a totally different way.

I think our sort of passion, or whatever I should call it, that all global health issues should be solved by development assistance. I think it's time to move away from that paradigm. It's still important. If I look at the relative importance of development assistance today, like in Kenya, it's much, much smaller. I think we need a different approach to the way that we are actually collaborating. We need global collaboration but of a different kind. We need money to finance a different kind of collaboration than what we had in the past.

I agree with most of that. We achieved a lot during the MDG era, especially then around child mortality and the three diseases. Today also, epidemiology have changed. When we started MDGs, we had 20 million people dying. Today, we have 8 million people dying from those three MDGs. We have 18 million people dying prematurely from NCDs in the world, 85% in low and middle-income countries. We are not addressing them as the global health community, but we should not address them by setting up a new fund. We need a different kind of collaboration.

What has also changed, if I look back 30 years, is also the political powers. Some people are frustrated with the geopoliticals of today that we have so much attention. I quite like it, because we have stronger political voices today. When you brought also The Lusaka Agenda to the African Union, really good. First time I've seen that there is political support from those countries for that agenda. Really important. That means, again, we need to play the game in a different way than we played it in the past.

We can't ask for development assistance to solve the problem. You can't ask for somebody else to finance. You can't abdicate from the responsibility. We need a different kind of partnerships where we take responsibility and we see the mutual benefits. For me, I think we are at a time where we need to begin to rethink the whole idea around both global health and development assistance.

Pete Baker: Great, Anders. Thank you. Yes, I really think that's an extremely valuable point about not just how the partnership works between donors and implemented countries, but also each partner to focus on what perhaps they do best. Rethinking about what DAH is actually best for, or what development assistance for health is best for. It may not be the same as what it used to be.

Moritz, so over to you now. I'm happy for you to take this either way. Would you like to respond to the same question about broad problems? Also, I'm very aware that you're one of the world experts writing books frequently on budget support, which is sadly not an area that has made much progress. When we looked at the number recently, it was a very small percent of global DAH that uses budget support. I'd love to hear your view on why that is the case. Over to you on perhaps on both those questions.

Moritz Piatti: Thanks so much. First of all, let me join the others with extending my gratitude for organizing this and bringing this important issue back on the table and inviting us to contribute here. I think there is a problem with the-- or there is an issue with the development community chasing attribution. We are all very concerned about attribution and we've invested rightly, plentiful into evidence. There's been a lot of work, a lot of good work on impact evaluations, trying to figure out what works. That is important in its own right.

The thing is what comes next is that the development community says, "Well, we've done all of this work on what works, so this is what we should finance." Then, of course, it goes to this issue that Dr. Mercy has eloquently pointed out, is that the minute one partner does something, it creates a disincentivizing effect for government. Why would they pay for something that's already been covered? Then you can easily follow on from there that this creates a sustainability issue because the minute somebody else takes care of something, governments are disincentivized for putting their own money down. And that's perhaps not even the biggest issue. It's that you don't build up the systems capacity. You don't build up the human capacity to deal with these sorts of issues. If you look at primary care, for example, we still deal with many of the same issues that have been raised many years ago. It's difficult to prioritize primary care, difficult to identify primary care spending, difficult to report on primary care spending. It just feels very repetitive. At the same time, there's a lot of money from the development community going into this issue.

I think there is a lot of good intent and a lot of good work has been done and results have been achieved by doing this impact evaluation work, by financing some of these interventions. The problem that this creates is that if we want to attribute results to the money that we put down, then it can create this disincentivizing effect. It's very difficult to deal with this problem because there are political constituencies for everyone involved. Everyone needs to say, "Look, our money has brought results." I think it's a legitimate problem that's been on the table for quite a long time. That's why already 20 years ago, there's the Paris Declaration and the Accra Agenda.

These things are not new. What's really new is that we can no longer ignore the problems that are here because it's just becoming overwhelming, both from a fiscal point of view and from an urgency from all sorts of directions. Yes, from a problem point of view, I think that's really central. Then looking forward, and perhaps we can talk about this later, is what have we learned over the last 20 years and what instruments are available to the development community and how can we work jointly and in collaboration with governments to make sure that whatever the type of support that is being delivered has the right incentives so that the engagement is more sustainable? Thanks, back over to you.

Pete Baker: Thanks, Moritz, great. Yes, and Kalipso, I wonder if you want to pick up on Moritz's points around the fact that we have had these problems identified many times before and we have had some of the solutions pointed to many times before, but we still seem to be going back again on some of those similar issues. I wonder whether you have any thoughts about going next step on the why, like why is it that we are still stuck on some of these common problems?

Kalipso Chalkidou: That's a hard one. I also wanted to follow up on what Anders said about aid not being relevant and I agree with him that it's not, but I also disagree with him in that it may well be for specific populations, interventions, and technologies. Unfortunately, there is quite significant aid dependency even amongst the quite wealthy nations for specific so-called vertical programs.

I just wondered, our colleagues from UNAIDS offered this statistic a few months back, I think it was the spring meetings they presented. This is HIV-specific, obviously, and it goes to the point Mercy made about how money is fungible ultimately. Of course, ministries of finance respond to incentives are being quite logical. 3/4 of the HIV response in low-income countries is externally financed. If you look at the total health expenditure, only less than 1/3 comes from external sources to Anders's point that even the poorest countries manage to finance, however, incompletely perhaps, but manage to spend on health.

If you look at lower-middle-income countries, only 4% of the total health expenditure is made up of international financing. They're absolutely irrelevant. When you look at the HIV response, more than 1/3 of it is donor-funded. I think this tells us something about what the last 20 years mostly of these vertical funds, what they've done, they've achieved a lot, as Mercy said, the Global Fund has been a fantastically pro-poor intervention. There's strong evidence to show that.

Over the years, because circumstances change, and certainly now we live in a very different world than when the funds were set up, but the structures haven't changed. The money has increased. There's distortions, effectively, that we're observing. I think that's quite problematic, even countries like Indonesia, for instance, which is an amazing champion with fantastical leadership, an amazing champion of UHC and supporting primary health care financing, et cetera. Even there, there's quite significant dependency on the Global Fund when it comes to TB and HIV.

Again, the question is, were the Global Fund to leave, would Indonesia step in? Almost certainly it would. In different settings, poorer settings, where the systems haven't been built, then that's harder to do. I think that's one point. The second to Moritz's point about PFM, and I think we need, there's a lot of discussion amongst funders about the appropriateness, the maturity of public financial management systems, and whether countries' systems, especially in weaker governance settings, whether they're up to scratch, whether they can accommodate donor funds flowing.

Again, back to Anders's point, I think, perhaps we, in the aid world, take ourselves a bit too seriously. These are functioning economies, one way or another. In many cases, you have World Bank, IMF, and others financing on budget, and yet you have those disease-specific, population-specific, intervention-specific funds funding in a certain way, intentionally bypassing government mechanisms.

This sets also some incentives or disincentives. The whole thing is sort of, it's quite dynamic. I think those vertical funds ought to take some responsibility for those systems not having built up to the level they would like to see them be built up in order for them to fund through on budget. We've got a fantastic example with the leadership of Minister Pate in Nigeria, with the SWAp back reintroduced, with the World Bank present, with a number of external donors, and increasing support for channeling funds through the SWAp. With all the weaknesses the SWAp model has, but nevertheless, improving in efficiency and really putting our money where our mouth is when you talk about country leadership. There's no other way. It has to be done like that.

To your point then, Pete, about what do we need to do differently? I think we need to continue reporting. There's been huge discontinuities when it comes to data being put in the public domain as to how well we're doing against the Accra Agenda for Action, the Paris Aid Effectiveness Agenda, Busan, we had IHP+, the 3Gs, the 4Gs, GAP, UHC2030, all of these, and now Lusaka, all of these initiatives state more or less the same thing, that country systems matter, that money needs to flow a certain way for countries to be able to set their own priorities and act on them for accountability to exist globally and importantly, nationally. If this doesn't happen, then you have all sorts of perverse consequences.

To track progress against those principles that many countries and vertical funds and other financing institutions have signed up to, certainly the Paris Aid Effectiveness Agenda, it's got hundreds of signatories, including countries and donors, but to track progress, you do need to report. Moritz, of course, that's the bread and butter of the bank and the governance group, putting out those PFM, those indicators, public financial management, how much money is flowing on budget, how many countries' money flows through commercial bank accounts as opposed to treasury bank account.

This is not new, and we have the theory, and we have the practice, and we have the indicators. There have been, if you look back around 2008, 2006, they've been reporting against those indicators by vertical funds. We've had some numbers again, 2014, 2016, and then in between we stopped, and then we stopped ever since as well. It's been 10 years since we saw these figures. That's why I think it's important, Pete, the stuff you've put out on the Lusaka tracker, because really if we want to talk about accountability, we need evidence, not fuzzy narratives.

Everybody internalizes ultimately the need for change, and then nothing changes. Everything continues exactly the same way. Yet Lusaka has become almost mainstream now and quite fashionable, and that's problematic. What are the numbers telling us? The numbers, unfortunately, are not telling us much because you don't have visibility of financial flows. There's a problem there. There's a performance issue there, and there's a governance lapse. That's where I think those who sit on the boards of these institutions who also sort of sign up to the narrative and say all the right things, and they also sit on the boards of the World Bank, and they also sit--

Those people need to start asking questions about where the numbers are and why people have stopped reporting, why institutions have stopped reporting. If we want to talk about empowering civil society, for example, which has been a sore point with Lusaka at the beginning at least, civil society will be empowered when they have access to information about what the government says they're going to do and they don't do it, resulting in stockouts and program discontinuation, when they have access to what donors say they're going to do and they don't do it. For that, you need to have information about what these donors or what these governments have said they were going to do in the first place.

You need to have information about financial flows, whether the money did flow a certain way, and it did buy the things that the donors and the government said it would buy. So I think when we want to talk about accountability and empowerment, it can't be self-commitments and self-regulation on the part of the good, well-wishing, and well-natured donors. It has to be about figures put in the public domain, consistently reported against. Then you can have people asking the right questions, I think, the difficult questions.

Pete Baker: Nice. Yes, that accountability piece is absolutely critical here, isn't it? Maybe that is a really nice moment to come back to you, Mercy, because you, of course, co-chaired the Future of Global Health Initiatives process that led, in the end, to that Lusaka Agenda that Kalipso was just talking about. I wonder how you reflect on that now and whether it's making progress and how the world can build on that and make more progress towards that direction.

Mercy Mwangangi: Yes. I was laughing when Kalipso was saying The Lusaka Agenda is now fashionable, and it reminded me of the pains at landing at The Lusaka Agenda. There were pains because I think one of the things that we cannot ignore is the big question of the political economy of this discussion that we're having. Perhaps also the idea that development assistance, while by the very nomenclature reads development assistance for health, sometimes comes in as an emblem of perhaps foreign policy relationships with different governments and et cetera, and of course has demands for accountability and alignment to foreign policy from the investing governments. I think my take-home from The Lusaka Agenda process, which was essentially a 14-month process of several governments co-chaired by Kenya and Norway coming together around the table with GHIs, contributing to some body of work that was trying to define should we sunset the GHIs and should we perhaps have common measures of measurement that are common, I think the big thing that resonated for me is the idea that this is perhaps more than anything, not an intellectual process but a political one.

Maybe, I remark and I'm happy and I've heard Anders say that, that this landed at the AU. I was reflecting on all the other past processes, Paris, Addis, GAP, et cetera. It almost feels like there's always efforts by all the different team members or team members of this choir. At one point, there's a push by country voices. At one point, there's a push by GHIs themselves and actors in the global health space at one point. There's a push from a different fraternity, maybe, implementing development actors, civil society.

I think that we will get to this middle box of process to solution if we can all sit around the table together. It sounds so cliche and cringe, but really, I think this is entirely going to be driven by political forces. If not by those political forces, then it's going to be driven by a collapse pretty much of the system because the system will be overwhelmed. I'd like to also share a reflection on the tracker. I think the tracker is absolutely fantastic. I think that as we move towards all coming around this tracker, it's going to be important to perhaps also strengthen it by looking at a multisectoral approach to it.

We all know that right now, climate is a big deal. A lot of engagements are being held on climate change, on pandemic preparedness, global health security, a lot of fashioning of new mechanisms. It might be important to broaden that tracker and perhaps hopefully even use it as a lens for some of these new funds that are coming up on sort of what they should anticipate going forward in the years to come. Again, it all goes back to political mobilization for this to take place.

I must say, despite, again, all the statements that we, and all-- the idea of the fatigue that this has been going on since Paris, et cetera. I'd like to recognize that the needle is shifting. The GHIs have come together into subcommittees to hopefully look at some of these measurement mechanisms that have been proposed at the African Union through Africa CDC. I know there are efforts to think about what happens next after The Lusaka Agenda and how do we move that into action and implementable steps. We have had engagements with GHIs who have taken charge and are developing roadmaps on how they could potentially execute The Lusaka Agenda.

All this is very positive. I think I dare say I'm precedented, particularly at the GHI space. I think, as Kalipso has said, we need to make more noise and we can only make more noise if we have data and visibility to data. I think really calling on Moritz to get back those documents up that he used to do years ago and share with us that data, and then we could all come together and make noise on this space.

I think the other element which did surface, and this is my last point during The Lusaka Agenda discussion, was the idea that governments lack mechanisms for accountability. Sometimes I think the blindness by all of us in the global health space to some of the parliamentary mechanisms that exist. When I was sitting in government, there were opportunities to be able to share off-budget reports for GHIs, but I can tell you some of the reluctance was actually coming from the GHIs themselves. These opportunities are there and sometimes you are blind, purposefully so, to accessing the mechanisms that exist at country level. Back to you, Pete.

Pete Baker: Thanks, Mercy. I was also particularly struck by the risk of collapse if we don't get this together, the risk. I think that also brings back Kalipso's point of some of the concentration of aid on certain populations and diseases because if there's a collapse, there could be a group that are really severely affected by this. So it needs to be a planned adjustment to the reform on the global health system, not donors throwing their hands up in the air and the whole system collapsing without careful planning. I also wanted to come back to that politics point you made, Mercy. In the end, this is very political and of course, the interest groups are there and GHIs are themselves an interest group. Anders, it's your turn next, but luckily you're an ambassador, or have been, so you're very familiar with politics, of course. I wonder whether you could give us your reflections on that.

I'm thinking also of the COVID era and some of the distrust that emerged from that. Do you think we're in an era now where donors and recipient countries can build that trust and reform some of these systems together? Do you think we're entering into a positive era that that is possible, or am I being naive? [chuckles].

Anders Nordstrom: Yes and no. In some way many of us are a bit. Peter Piot called me cynical in Berlin a few weeks ago, and I suppose we are a little bit depressed on the present geopolitical situation. On the same time, looking back, it was not easy at that time either when we started the Global Fund. That was a big fight, and there were big tensions. I think there's always hope. I think the realization that politics matters, and let me give you three comments on that. One in terms of what Mercy said in terms of political economy, I really think we need to dig much more into that.

Understanding the powers behind the political economy behind, that was, I think, a shortcoming with the Future of Global Health Initiatives. That one didn't go enough into the political economy behind. The setup of the Congress in the US, how is that influencing? In governments that you have different parts of government then supporting WHO and other parts of the international system, or you have different people having interest in GAVI and some in GFF and some in the Global Fund. There is a political economy, they have self-interest in this.

What gives me a lot of hope here, that is also when, as I said, African Union and what we have called at least this for implementing countries are speaking up and not being given powers but taking power. I think that's really the future. On that note, I think power is about money. Let me say one word before I talk a little bit more about money and power and where the hope is in some way. We spoke about the Lusaka Agenda but also looking back.

Again, I'm old enough to have been part of designing the SWAps from the very beginning with Andrew Castles and testing it out in Uganda, in Zambia, and then coming to Kenya, et cetera. I was in Accra, I was at Downing Street when we did the IHP+, I was part of creating the H8 with all the key partners bringing the heads together under the leadership of Jim Kim at that time at the World Bank. Unfortunately, it didn't work, that's the bottom line, it did not work.

Today I do have a little bit of hope, you said the needle has shifted, and that's again coming back to that we have more of non-financing countries that are stepping up and saying enough is enough. We need more of that but also not just saying enough is enough but also taking the responsibility. That's my last point here is money talks. I think quite a few countries need now to step up. Kalipso, so you were referring to Nigeria and Pate saying it's great that they are doing a SWAp, I'm not sure about that's the best thing and the most important thing.

They need to increase the taxes. The level of taxation in Nigeria used to be 16% or 18%. In Sweden, it's 48%. You had a big fight in Kenya when you try to increase the taxes because the country was not prepared for that but that's where you need to go. You need basically to bring income, money into the government that is not going into the government that is flowing outside the government. I was the head of the WHO country office in Sierra Leone, one of the poorest countries in the world. Are they? They are not. They have tons of diamonds, they have tons of minerals but that is not going into the Ministry of Finance, it's flowing outside the system.

I think one needs to begin to talk about that, that aid has also in some way gave us some disadvantages and most importantly, people in those countries because the leadership is abdicating from the responsibility. I think we need to begin to speak about that. That, yes, taxes can be increased, corruption can be dealt with and there are issues here to take the responsibility because if you do that, if you put the money on the table, which has begun to happen, then you will also get the power and the influence. Sorry.

Pete Baker: Thanks. Anders, are you coming back, or you're finished?

Anders Nordstrom: I think I have finished with that point, but I think there are things here that we are not discussing well enough yet. That's where I began. We're still too focused on the development assistance and the donors. Let's speak about donors and implementers, if we call them that, I don't like it. Still, we need global collaboration, and we need mutual respect and appreciation, and we are dependent on each other, but then we need to play the game from both sides. I think we have things to change on both sides. It's not just on the so-called donor side, it's definitely also on national government side that needs to change, and especially when it comes to the financing.

Then I recognized that all countries that can't still make it, and as Kalipso said, "All countries for certain burden of disease," like when they say the AIDS in Malawi, they will still be dependent on external resources, absolutely, but those are quite few.

Pete Baker: Thanks, Anders. Thanks for taking on some of the difficult questions around politics and the political economy and also reminding us to recenter domestic financing of health has been the key issue really in success for delivering health services. I guess partly our New Compact piece was trying to get at that as well of saying aid needs to be additional in most countries and governments need to finance their core services themselves.

Moritz, perhaps with that in mind and thinking about your work on budget support, where do you think that's going next? How do we get to a stage where that is a more common modality, if that's what you want to make the case for? I'd also love to hear your view on whether we could get further on the Lusaka Agenda by better data through the World Bank as well. If you've got any views on those discussions as well, that'd be great, but over to you.

Moritz Piatti: Sure. I fully agree with everyone on the points on data that it's important to work with good data. I'm not sure I'm personally in a position to change anything about that, but the way that we collect data on how it is channeled through government systems is critical. It helps to visualize and to have clear metrics on how you calculate these things because it gives you a baseline, it gives you something to improve on, and something to target, and something to compare yourself to.

I think there's certainly quite a bit that one can do in this space. On budget support, there's a lot of evidence out there that many aspects of budget support have worked. Budget support was originally, can be seen as the vehicle to implement Paris, everything around the Paris Declaration. There was this idea of having a joint development compact where you say, "Okay, this is the joint plan, let's all buy into it, and these are going to be joint results."

Then for a variety of reasons that may have been more political than evidence-based that the perception that budget support doesn't work has come up. I think that a reckoning is needed when we discuss this and what is the role that budget support can actually play in what type of setting and what can we expect from the instrument. If we think about financing the recurrent cost of services, and the recurrent cost of services is being supported through projectized aid, it's always going to be different from when government goes about doing things.

It's not only a question around putting money on budget, and it's not only a PFM question. I think actually PFM may be of lesser importance in this whole issue because you can put money on budget, you can put money on treasury and so forth but still create an environment where you operate in a way that is parallel or different to how government operates, and then you still create this fragmentation despite making use of the PFM system.

When you provide budget support, you don't do that because money becomes, by definition, fungible. You can't chase every dollar and to what happens to the dollar. I think that is something that we need to be explicitly cognizant of. Because that's the separation between the recurring cost of services and large investments and so on. There is evidence out there. We do know what's worked and what hasn't worked around the budget support discussions. Perhaps the last thing I would like to say is that we often use this term budget support quite freely when there are really many different iterations or different versions of the instrument that serve different purposes. If we all throw it into the same bucket, there is the risk of being disappointed with the performance of the instrument.

You can try to crowd in private capital through policy-based guarantees, for example, or you can have a programmatic engagement where you keep working on policy reforms over a longer time horizon, or you can have these once-off crisis response operations, or you have these drawdown options in case of an emergency. All of these serve a different purpose, but this overarching, if one does engage in budget support, this overarching question of how does this serve a common vision, a common purpose of getting everyone around the same table, I think remains very important.

Perhaps, just to say, interest in budget support from a country's perspective has always been there. For most countries, budget support is the instrument of choice because it gives them the flexibility that they need. Then with partners, it's ebbed and flowed. We have seen that in many of the crisis years, there are peaks. After the Asian financial crisis, there's been a peak in budget support. After the global financial crisis, after the COVID crisis, and to quite significant amounts.

This question of budget support being ongoing and perhaps sometimes outside of the visibility of people working in the health space is an important point.

Pete Baker: Thanks, Moritz. We've had some good questions that come in from the audience as well that I would like to put to everyone. Kalipso, you were next up, so I'd like to bring one to you if that's okay. The idea from the audience is, from all this discussion, which of these options, including the New Compact and others, might be good at pulling more or incentivizing more domestic financing for health? If we're going to center domestic financing for health, how does these options for solutions to DAH interact with that? Which options are best at bringing in domestic financing for health?

Kalipso Chalkidou: Oh, right. Which options are bad for bringing in domestic financing for health? I think it depends also how we define domestic financing, going back to whether there's money out there. I agree that governments need to take responsibility, and in fact, going back to the structural adjustment era, that was the time the governments were let off the hook and international NGOs were allowed legitimately to step in and pick up social programming whilst the governments were trying to deal with being corrupt and improve themselves. Unfortunately, we're back in the same situation again.

Now, we have the verticals stepping into health systems in exactly the same way, channeling funds in the same way, and really absolving governments of their responsibility to look after their citizens. This involves also building trust, the social compact, and getting people to pay taxes where possible when people see that these taxes are used effectively. It's difficult, it's not easy. On domestic financing, and whether aid matters or not, I would say it matters not because of the amount of aid, but because of what grant money in health can do to crowd in resources. The question from the colleague in the audience.

You've got some of the vertical funds right now are bigger than all of the climate funds put together. If you look at climate financing, and I don't think we do enough of that, climate financing works, not that it's not super fragmented, but it works in a way where the money flows somehow leverage each other. You've got the Green Climate Fund working with the World Bank, increasing the concessionality of World Bank lending and influencing the content then of that lending and shifting in a certain way, supporting the technical assistance, et cetera. I think that's quite important right now, because when you look domestically at revenues and you look at debt servicing in particular, just to give some more figures, just this year, the world's 75 poorest countries, and more than half of those are in Africa, will spend more than 185 billion, and that's 7.5% of their combined GDP, to service their debt.

That's more than these countries spend annually on health, education, and infrastructure put together. It's not that these countries have a huge debt, the debt stock is actually quite small compared to France or the US. They have to borrow at rates that are high street rates. I would use my credit card to buy 12-13%, that's what they're rolling the debt over, that's what's happening in Kenya, and it's short term debt, so they're swapping long term with short term, and they're also moving towards, because they have to, not because they choose to, really high interest rates, and the next time they'll come to roll their debt over, it might be really impossible.

What do you need? You need domestic financing, precisely because resources are scarce. This is the time to invest in human capital, invest in people, invest in education, invest in health, because that's what ultimately drives the economy, it's not the other way around. At the same time, for them to do this, for governments to do this, they need very large volumes of very concessional, long maturities, low interest rates, long grace periods, cheap money. That becomes domestic effectively, it's on budget, it comes to them, and that's the role of multilateral development banks there to do this.

The role then for GHIs, which are not that large, though in health, in some countries, they are quite overwhelming, if you take some of these verticals together, we'll say PEPFAR, they're bigger than the bank across all sectors, especially IDA. What they could do is, we could use the money, or the global health deciders could use the money to leverage, to increase the concessionality of lending. Multiple times, three, four, five times, that's that leverage through the markets, even IDA, which is the concessional arm of the World Bank, goes out to markets and leverages, brings in more money, crowds in private investment.

This then becomes cheap money that goes on budget, and to Moritz's point, it's not projectized, it's basically country money. The country decides how to prioritize. If GHIs worked alongside MDBs to achieve this, then their really important expertise in those diseases, those interventions, those populations reaching those-- this would be really super important, that you'd get those specific indicators effectively driving also increasingly, hopefully, domestic commitments as well as the economies pick up. At this point, it's really difficult for people to do this because of the dire situation.

Post-COVID, countries borrowed so much to support, to boost their healthcare, and support social protection, et cetera. Now the interest rates have gone through the roof, and it's really impossible for them to do much unless they're able to access cheap capital. I think that's quite important right now. Thanks.

Pete Baker: Thanks, Kalipso, and great to bring up the MDBs. I think we've gone too far in this conversation, perhaps without bringing their role in as much as it should do, as well as climate financing as well. We haven't covered that enough. Mercy, I'd love to hear your views on the next steps for Lusaka. The particular question from the audience is GHIs tend to need to focus on attribution. It's very important to them. They need to be able to say what their results are. Now there's this push for GHIs to work together in unison and also in theory guided by national priorities across the board and perhaps even some kind of single application process, all these kind of conversations. How do you see that going forward? How do you see that tension being resolved? And do you see it being resolved?

Mercy Mwangangi: Thanks, Pete. I think we have progress. Like I mentioned, even while working on the Lusaka Agenda and towards the end of the Lusaka Agenda, we did receive a lot of positive steps forward in different boards where I think Gavi and Global Fund did agree to work on a joint program of work on four areas and particularly focusing on malaria, the malaria vaccine, and intersections of climate within that. Again, unprecedented and a move forward in the right step. I think we've had conversations, again, with Global Fund to look at representation of Global South countries in the boards.

We've had the Africa group come together and support this. Again, positive moves and availing new, so to speak, board seats that are representative of all the different regions in the world. These are positive steps. We've had discussions initiated and the thought process of having some form of roadmaps that identify pathfinder countries where we can actually come together as GHIs and figure out, "Okay, how do we start measuring together? How do we even perhaps conceive a joint application process?" I think, I would say, the true test of time is we all know replenishment season is coming around the corner. I think we will be able to see what happens during that season and after that season. But I think the biggest thing really, really at the end of the day needs to be: how do we empower all the actors, be it civil society, be it countries, how do we empower them?

Really, I'm a champion of the Lusaka Agenda and its process, and particularly the pinning down on the use of data and information. It sounds like it's something that we always say all the time, but I see if we can hold a mirror against each other, GHIs, a mirror to GHIs, a mirror to countries, and this mirror has then some data and some indicators, then we'll be able to see movement. I think if I look back at the process, and Anders has shared this, some of the things that we could have done better if we had more time, more resources, perhaps would have been a deep dive into this whole discussion about common metrics and how that would look like and bringing in, of course, the political momentum.

I think we're in the right direction. I think we're moving towards the right direction. If I could just, I really enjoyed what Moritz and Kalipso were saying on the debt situation and sometimes, I guess, what we've called the unintended consequences of GHIs. In Kenya, three years ago, we had some support from the GFF, fraternity and consortium towards reproductive, maternal, newborn, and adolescent health. When we were trying to set this program up, especially after getting endorsement at the sub-national level, we actually had to set up special purpose accounts in all the different counties to be able to ensure that monies were able to flow direct to facilities.

The good thing, and it was cumbersome, and it was messy, it introduced costs to setting up accounts. However, I can tell you right now in Kenya, there's almost a standing ovation and choir for direct facility financing, and it's through that process. That's why we have some of those gains. If you look at budgets at sub-national level, again, through this very same program, county governments now have been able to put in place a certain threshold of financing for health, and particularly just because it came about from the discussions through this joint investment with GFF and country.

There are some positive things that come out of this. I think at the end of the day, the idea is how do we surface them all and how do we actually get into the devil in the details in measurement of what true impact is. Back to you, Pete.

Pete Baker: I'm afraid I think we're at the end of time, sadly, but thank you very much, Mercy, for the insights, and thank you to all the panel. I think we've had a fascinating conversation around all the problems with DAH, around actually I think some quite positive solutions going forward as well. I like Mercy's optimism that actually there is some consensus going forward on some of the solutions around the Lusaka Agenda, perhaps the new compact, some of the ideas around concessional loans that Kalipso and Moritz were talking about as well as being an important future option as well that could be expanded.

I think we all need to take into account the political elements that Anders and Mercy were focusing on as well, perhaps even the idea of really countries that receive aid might need to take power more than be given power, as Anders made it. That's perhaps particular reference to the AU's approach of taking a lead on the Lusaka Agenda. In the end, the progress probably won't be made unless there's some accountability and accountability in the end needs transparency and it needs data and it needs people to take that more seriously going forward.

Thank you to all the panel and thank you to audience for joining us. Please stay in touch with CGD online, on the newsletter, and this, of course, can be watched online in the future as well. Thank you, everyone, and have a good day.

Anders Nordstrom: Thank you so much.

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