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Most deaths in low- and middle-income countries are caused by non-communicable diseases such as cancers, diabetes, heart disease and injuries. Many of these deaths could be avoided by reducing smoking, excessive alcohol consumption, and high-sugar diets. Uniquely placed at the intersection of the health policy, research, and finance communities, CGD aims to advance understanding of this problem, the industries that promote these products, and the cost-effectiveness of public policies. Our experts are also involved in high level international efforts to promote effective pro-health fiscal policies such as excise taxes on tobacco, alcohol, and sugary beverages.
This week, Mayor Michael Bloomberg and former Treasury Secretary Lawrence Summers announced a new Task Force on Fiscal Policy for Health. This is the first time such a high-level group of respected economic and fiscal policy opinion leaders has convened on this issue, creating an opportunity to acknowledge the importance of taxes for promoting health and to take action to save lives.
This Wednesday, you will be attending an event on tobacco taxes at the World Bank’s annual meetings, where President Jim Kim and Mayor Michael Bloomberg will be speaking. You will be attending this high-level discussion along with about 14 other Finance Ministers. While the meeting may look routine, it is actually one of the most important you will attend this week. You will be discussing how the Finance Ministry can save more lives than the Minister of Health—by raising tobacco taxes in a way that best discourages smoking.
In 2015, India's system of fiscal devolution underwent a radical transformation. This paper uses the experience of Brazil, China, and Mexico to draw important lessons on how India can use the opportunity of fiscal devolution to create a better system of health financing through better policy coordination between federal and local governments.
In the big decentralized countries where global disease burden is concentrated, such as India and Indonesia, most public money for health isn’t spent by the national ministry of health, the traditional counterpart for global health funders and technical agencies. Instead, most money is programmed and spent subnationally.
Greater subnational public spending reflects growing democratization, power-sharing, and local self-determination. It also responds to the conviction that local decision-makers understand local realities better than a bureaucrat sitting in the capital city. Yet evidence on the effectiveness of subnational spending on health care and outcomes is mixed at best, and incentives for greater spending and better performance can be weak.
India matters for global health. It accounts not only for about one-fifth of the global population, but also one-fifth of the global disease burden. Yet the Indian government spends only 1 percent of its GDP on public health—a paltry amount compared to what other large, federal countries like Brazil and China allocate (4.7 percent and 3.1 percent, respectively). This has a direct impact on Indian citizens who pay more out-of-pocket for health care than citizens in any other G20 country.
Most money and responsibility for health in large federal countries like India rests with subnational governments — states, provinces, districts, and municipalities. The policies and spending at the subnational level affect the pace, scale, and equity of health improvements in countries that account for much of the world’s disease burden: India, Indonesia, Nigeria, and Pakistan.
2015 has been the year we have been reminded that there have been major gains in development in many parts of the world, but that hundreds of millions of people still suffer the dangerous consequences of poverty, including high levels of maternal and infant mortality, hunger, illness caused by lack of basic sanitation, and death from easily treatable diseases. How can we improve health systems to make them more effective, as well as less wasteful and more accountable?