The Politics of Priority Setting in Health: A Political Economy Perspective - Working Paper 414

Many health improving interventions in low-income countries are extremely good value for money. So why has it often proven difficult to obtain political backing for highly cost-effective interventions such as vaccinations, treatments against diarrhoeal disease in children, and preventive policies such as improved access to clean water, or policies curtailing tobacco consumption? We use economic models of public choice, supported by examples, to explain how powerful interests groups, politicians or bureaucrats who pursue their own objectives, or voting and institutional arrangements in countries have shaped health priority setting. We show that it may be perfectly rational for policy makers to accommodate these constraints in their decisions, even if it implies departing from welfare maximizing solutions.