How do major health donors prepare for country exits?

This blog was first published in Brookings Future Development Blog. The authors, Kaci Kennedy McDade, Osondu Ogbuoji, Marco Schäferhoff, and Gavin Yamey have authored a review “Health aid in transition: a review of the Global Fund to Fight AIDS, Tuberculosis, and Malaria.”

Many development donors use country income levels—typically gross national income per capita—to ensure that their support for health systems in the developing world goes to countries with the greatest need. As a result, donors often reduce support when countries graduate from low- to middle-income status. While this graduation reflects advancement in economic development and is cause for celebration, transitions away from donor assistance for health typically bring significant challenges for middle-income countries.

The evidence also appears to indicate that countries that are expected to graduate from multilateral health assistance over the next decade are more vulnerable to backsliding and disease resurgence than countries that graduated in the past. For example, a recent comparison of upcoming graduates and previous graduates found that upcoming graduates “seem to have, on average, lower per capita income, greater indebtedness, weaker capacity to efficiently use public resources, more limited and less effective health systems, weaker governance and public institutions, and greater inequality.”

This is particularly worrisome in countries where the main funding for treating and preventing deadly diseases such as HIV/AIDS in key populations—for instance, men who have sex with men or people who inject drugs—comes from donors. Vulnerable populations in these countries face possible service coverage disruptions if social contracting mechanisms—whereby governments provide funds directly to civil society to implement specific activities—are not in place prior to a donor exit. In short, a sudden reduction or withdrawal or, even worse, a simultaneous withdrawal of external assistance by several donors has the potential to cause major disruption to the health system. This disruption can be particularly devastating for a transitioning country when external health support is concentrated among a small number of donors.

Without proper preparation, the progress of transitioning countries may slow or even reverse as a result of the loss of donor aid and technical support. This undoubtedly is detrimental to global public health and impedes progress toward reaching the Sustainable Development Goals.

Preparing for country ownership

Transition policy and planning are becoming an increasingly relevant concern for both donors interested in program sustainability and countries navigating away from external support and toward full country ownership. However, many donors have only recently begun to consider formalized exit strategies and plans. Even when this planning has happened, there is little publicly available information on the governance of transitions.

In an effort to improve public knowledge on transitions from health aid and to lay the groundwork for further research, we recently analyzed how major funders approach country transitions. This is part of a Duke University project on the transitions in disease burdens, domestic finances, and donor support in middle-income countries in Africa and Asia, at the Center for Policy Impact in Global Health. Based on our analysis, we will be publishing a series on how major global health funders are approaching health aid transition—the World Bank, the Global Fund to Fight AIDS, Tuberculosis and Malaria (the Global Fund), Gavi, the Vaccine Alliance, the U.S. government (with focus on the two agencies that provide the most funding for health, the U.S. President’s Emergency Plan for AIDS Relief and USAID), the U.K. government, and the Japanese government.

  • There is no common transition approach or philosophy among donors. All donors are assessing how they should structure their support to smooth the path to full country ownership. There are varying approaches to transition policy and planning and there is no consensus about a common set of criteria used to trigger these transitions and manage the adjustments. There is no real agreement even on the terminology used to describe this phenomenon.
  • Multilateral donors approach transitions in somewhat similar ways. In general, multilateral donors, such as Gavi and the Global Fund, have published transition policies with clear criteria for ineligibility. However, even in such cases, there are often significant exceptions to policies. For example, due to poor health indicators and a low likelihood of a successful transition, Nigeria received an extended transition period from Gavi, delaying its transition from 2021 to 2028. It is not clear whether these are exceptions to a rule or whether the decisions are based on discretion, not rules.
  • Bilateral donors approach transitions differently from multilateral donors and from each other. Many bilateral donors have identified ways to gradually and sustainably shift responsibility to domestic governments without fully exiting, such as shifting the modality of support (e.g., from grants to loans or from direct support to technical assistance), paving the way for eventual withdrawal. But others have not.
  • For donors with broad development portfolios, health-specific transitions can be unique from other sectors. Oftentimes, there is organizational guidance on funding allocations and eligibility, but health sector transitions can predate organization-wide transitions (e.g., USAID’s family planning graduations) or even receive special support after a country has graduated (e.g., the World Bank’s buy-down arrangement with the Global Fund for its loan to India for tuberculosis elimination). But again, there aren’t obvious rules that middle-income countries could use to plan these transitions.

Tracking the transitions

Good planning and sensible transition policies are needed as more low-income countries transition to middle-income status. To shed light on current planning and policy mechanisms, we will make available the findings of our donor transition analysis over the coming weeks, starting with the Global Fund. We also hope to provide pointers on how governments and donors can co-engineer sustainable transitions away from external assistance for health.

About the Authors:

Kaci Kennedy McDade (tweets @Kennedy_Kaci) is a Policy Associate at the Center for Policy Impact in Global Health, Duke Global Health Institute.

Osondu Ogbuoji is a Deputy Director, Lead Researcher at the Center for Policy Impact in Global Health, Duke Global Health Institute.

Marco Schäferhoff is Managing Director of Open Consultants.

Gavin Yamey (tweets @GYamey) is Director of the Center for Policy Impact in Global Health, Duke Global Health Institute.