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Channels and Sources of Foreign Aid for Health

Discuss about the Politics And The Effectiveness Of Foreign Aid.

Foreign aid for health which is also referred to as the development assistance for health refers to the resources which maybe in-kind or financial form that are conveyed from the primary channels of development to low and middle-income developing countries in order to maintain or improve health standards in these countries (Bearce & Tirone, 2010, p.837). Foreign aid for health can be mostly in the form of grants and loans which are actually offered at low interests. Foreign aid for health in needed by such low and middle-income countries due to the fact that many people in these countries cater for their heath needs through the out-of-pocket means. This lowers the health standards of such people as most of them cannot afford the high health standards due to their low level of income. Also many people from different developing countries are reduced to poverty level by the high unanticipated health care expenditures. The foreign aid for health helps to cater for all these problems. Foreign aid for health comes from various channels and sources some of which include corporate donations, private philanthropies (for example Gates and Clinton Foundation) and Governments of the richer nations. The various channels of foreign health aid include the Non-governmental organizations, Global funds, Development Banks (for example the World Bank) and the bilateral aid programs (a good example of this program is the government to government aid) (Pack & Pack, 2013, p.258). Foreign aid to a given developing country is determined by various factors some of which include the developing country’s need, recipient capacity to benefit, donor countries strategic plans and interests.

Foreign aid for health can be positive or negative to the offered countries. This depends on the management requirements involved in monitoring and reporting back to the donors on the aid utilization and the priorities put in place by the donors which may deform the country’s national policies.

Foreign aid for health has shown positive results in some countries. In Ethiopia, foreign aid for health has led to low mortality rates among children and improvement in family planning methods among women. The improved access to quality health care among the residents of rural areas and effective utilization of the foreign health aid in Ethiopia has seen children mortality rates decrease from 23% to 8% for the last 25 years. The U.S humanitarian agency under the president Donald Trump pledged to support Ethiopia with $ 137 which is to be used to cater for the food shortage, provision of specialized nutrition in order to treat malnutrition among children and also provision of safe water for drinking and other essential health services (Williamson, 2011, p.188).

Factors Determining Foreign Aid Allocation to Developing Countries

Afghanistan has been benefiting from health aid from various donors. HPIC brought a multi-year medical aid program for the people of Afghanistan. The program included provision of medicine and other services which focused on the well-being of children and women and also aimed at cooperating with the government of Afghanistan to assist in the construction of well-equipped local health centers. The CURE international hospital in Afghanistan was provided with $3 million of medicine and other medical equipments for expansion of its health care services. Various other donors including the U.S government have greatly contributed towards improving the health sector of Afghanistan (Knack, 2014, p.251).

The International Organization for Migration (IOM) has been constantly providing health care to the people of South-Sudan. South­-Sudan residents suffered from many diseases and malnutrition due to insecurity and the fact that they could not be reached out as they flea for their safety due to insecurity (Wilson, S.E., 2011, p.2032). IOM reached them in their remote areas and set up a clinic for them. The organization also provided the people with shelter and continued to build more health facilities in the remote areas to help those who travelled for longer distances to reach out the clinics. The organization also conducted water sanitation and the repairing of boreholes and also formed water management committees in order to provide clean water to the people residing in the remote areas of South-Sudan (Svensson, 2010. P.61).


On the other hand foreign aid for health has led to negative results in some countries. In fact its involvement in such countries has been more of a burden than a benefit. Tanzania which is a country in East Africa has been receiving a lot of foreign aid since 1970s. The foreign aid for health allocated to Tanzania does not seem to help the nation in terms of improvement both in health standards and the economy. The aid allocated to heath sector makes the government of Tanzania to lower the amount it allocates to the health sector and use it in other sectors of the economy. This substitution effect highly affects the nation of Tanzania as no positive results are realized from high amounts of aid allocated to the health sector (Atwood, Brian, Peter McPherson & Andrew Natsios, 2011, p.123).           

Pakistan has been highly relying on foreign aid for health to improve its health sector and its entire development programs. It started by obtaining foreign aid in form of grants to reduce fiscal strain and stir economic development. Later on the grants changed to hard loans. These loans led to drastic rise in the tax ratio to gross domestic product of the economy and as a result Pakistan faced a hard time in servicing her debts. The over reliance on the foreign aid led Pakistan to all these problems.

Positive Effects of Foreign Aid for Health

Foreign aid for health has led to disparity in wealth distribution such as Kenya. Some developing countries are really corrupt and the foreign aid for health donations may not even reach the intended people (Wijnbergen, 2012, p.123). Due to high corruption practices in Kenya the large portion of the foreign aid for health goes into pockets of those in the political dockets and their friends and families and never reaches the poor.

Foreign aid for health can be distortionary in nature to the recipient country. This is due to the demands and requirements put in place by the donors in as much as monitoring and reporting back the expenditure of the aid to the donor is concerned (Alesina & Dollar, 2010, p.33). Some donors even go a step further and dictate priorities which may interfere with the recipient’s national policy. Some approaches and policies which may be used to address these effects of foreign aid to health have been explained.

Increased local ownership of aid and greater respect for domestic priorities policy; this policy allows the recipient to exercise a certain degree of control over the aid extended. The recipient has the right to plan how the aid offered is to be spent provided there is no any plan to embezzle the aid donated by the donors. The recipient if offered a foreign aid for health can decide which departments within the health sector to improve without much pressure from the donor.        

No personal interests policy; this policy can help clarify the relationship between the donor and the recipient (Pack & Pack, 2010, p.188). The donor should not have strategic interests or plans as he donates the aid. The interests may be in the form of offering aid while targeting certain favors from the recipient such as trade favors. Personal interests make the donation more of colonization rather than help as the donation may not be extended if such favors are not granted.

Anti-corruption and governance policy; corruption is the act of misappropriating and embezzling public property (Pfeiffer, Johnson, Fort, Shakow, Hagopian, Gloyd & Gimbel-Sherr, 2013, p.2134). Governance on the other hand refers to the manner in which public officials and institutions exercise the authority acquired in provision of services to the public. The recipient should be accountable for every donation spent. The recipient should exercise a sense of responsibility in as much as expenditure of the donated funds or equipments is concerned whether or not the donor is interested on checking the expenditure report or not. Donors and the recipients can set up the anti-corruption committees or even audit institutions which are neutral and committed to eliminating corruption activities which may be involved in the expenditure of the donated funds.    

Negative Effects of Foreign Aid for Health

Adoption of the democratic reform policy; it is mostly likely that corruption levels or misappropriation of public funds is lower in democratic countries (Boone, 2014, p.289). Donors will feel free to extend their donations to nations which are democratic. Democratic nations hold elections regularly and hence top leaders exercise responsibility in order to be reconsidered again and have regular internal audits to check on the progress of the planned activities. Also in democratic countries people are free to demand for government accountability on various activities which they feel are not heading towards the right direction. The press is also free to uncover any corrupt activities within the government. Hence donors feel at peace when donating to democratic countries rather than corrupt dictatorship nations.  

Equality policy; all factors kept constant, the recipient countries should be considered equally when it comes to donation (Easterly, 2012, p.224). Proportionality bases should be considered in donation allocation. Donors should not favor some countries for personal reasons but should rather treat all the needy countries equally.

There has been evidence that the policies discussed help in improving the recipient countries health system outcomes. Latest the U.S government under the leadership of Donald Trump has allocated funds to Ethiopia and Kenya proportionally to help improve their citizens' health care. Ethiopia got a large portion since they have more needs as compared to the Kenyan nation. World Health Organization has also joined the IMO in improving the lives of the South-Sudan people by provision of malaria treatment medicine and treated malaria nets. This is a great move and with consideration of the formulated policies, donation can actually be more helpful and taken positively by the recipient nations rather than being viewed as a distortion.

Conclusion

In conclusion, foreign aid for health can be disadvantageous or advantageous in nature to the recipient. The manner in which the recipient countries utilize the allocated foreign aid for health determines the rate at which the health sector of such nations improves (Alesina & Weder, 2012, p.1126). Countries which use the foreign aid for health with addition of their allocated funds portion to the health sector, greatly improve the health standards of their citizens. The demands and requirements of the donors for the monitoring and reporting back on the utilization of their donated funds make it a burden for the recipients and may even distort the recipient’s national policies. Some policies have been put in place to minimize the distortionary acts of the donors and make donation funds beneficial and free from the colonialism imagination by the recipient countries. Therefore foreign for health can be beneficial or a burden to the recipient based on the mode of utilization and the requirements of the donors for the monitoring and reporting back on the utilization of their donated funds.

References

Alesina, A. and Dollar, D., 2010. Who gives foreign aid to whom and why?. Journal of economic growth, 5(1), pp.33-63.

Alesina, A. and Weder, B., 2012. Do corrupt governments receive less foreign aid?. American Economic Review, 92(4), pp.1126-1137.

Atwood, J. Brian, M. Peter McPherson, and Andrew Natsios. "Arrested development: making foreign aid a more effective tool." Foreign Affairs (2011): 123-132.

Bearce, D.H. and Tirone, D.C., 2010. Foreign aid effectiveness and the strategic goals of donor governments. The Journal of Politics, 72(3), pp.837-851.

Boone, P., 2014. Politics and the effectiveness of foreign aid. European economic review, 40(2), pp.289-329.

Easterly, W., 2012. The cartel of good intentions: the problem of bureaucracy in foreign aid. The Journal of Policy Reform, 5(4), pp.223-250.

Knack, S., 2014. Does foreign aid promote democracy?. International Studies Quarterly, 48(1), pp.251-266.

Pack, H. and Pack, J.R., 2013. Foreign aid and the question of fungibility. The Review of Economics and statistics, pp.258-265.

Pack, H. and Pack, J.R., 2010. Is foreign aid fungible? The case of Indonesia. The Economic Journal, 100(399), pp.188-194.

Pfeiffer, J., Johnson, W., Fort, M., Shakow, A., Hagopian, A., Gloyd, S. and Gimbel-Sherr, K., 2013. Strengthening health systems in poor countries: a code of conduct for nongovernmental organizations. American journal of public health, 98(12), pp.2134-   2140.

Svensson, J., 2010. When is foreign aid policy credible? Aid dependence and conditionality. Journal of development economics, 61(1), pp.61-84.

Van Wijnbergen, S., 2012. Macroeconomic aspects of the effectiveness of foreign aid: On the two-gap model, home goods disequilibrium and real exchange rate misalignment. Journal    of International Economics, 21(1-2), pp.123-136.

Williamson, C.R., 2011. Foreign aid and human development: The impact of foreign aid to the health sector. Southern Economic Journal, pp.188-207.

Wilson, S.E., 2011. Chasing success: health sector aid and mortality. World Development, 39(11), pp.2032-2043.

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