Economic evaluations alone cannot determine how much should be spent on combatting HIV/AIDS or how that money should be spent. Allocating resources cannot be reduced to a technical exercise. Priority setting involves a range of value judgments and requires a process which provides legitimacy. Economic evaluations should, however, play a central role in such a process. They highlight the trade-offs which have to be made in resource constrained environments, and can draw attention to the value judgments which have to be considered when making these trade-offs. In the absence of sound economic evaluation other factors which shape priorities may have undue influence.
This discussion paper examines the role of economics in HIV/AIDS priority setting, with a view to identifying research priorities. Specifically the paper will examine how economic evaluations of existing and candidate interventions can inform resource allocation decisions. The paper focuses on allocation decisions of responding governments, although the role of donors and other actors will also be considered. The allocation decisions of responding governments can be divided into three stages:
1. Allocations to relevant ministries from the ministry of finance
2. Allocations from ministry budgets to HIV/AIDS programmes
3. Allocations to specific HIV/AIDS interventions within HIV/AIDS budgets
To date, with only a few exceptions, economic evaluations do not appear to have played a major role in resources allocation decisions related to HIV/AIDS. Countries with similar epidemics and similar socio-economic contexts have been observed to spend money in very different ways, which suggests that a systematic assessment of how best to spend money has not been done, or has not been considered.
A number of reasons have been given for this outcome, they include: lack of data, lack of in-country technical capacity, contradictory messages on which interventions work, unwillingness to target certain population groups, inefficient planning and implementation, and donor influence. As a result, policies may often reflect political motives and wishful thinking, or simply historic spending patterns (i.e. past political motives and wishful thinking).
Even simple cost considerations are often ignored, with costing only occurring after decisions have been made. Without a consideration of costs and other resource constraints, strategic plans become a wish list – with no planning for what to do if there are insufficient funds available to implement the plan in its entirety. Then, when resources are insufficient, the decisions on which aspects of the plan to implement are often made in an ad hoc manner and reflect the priorities of those with influence over budgets.
Download the paper “Priority setting and HIV/AIDS: Formulas and processes” by Dr. Chris Desmond as a PDF file.
Dr Chris Desmond is a chief research specialist in the HIV/AIDS, STIs and TB (HAST) research programme.
He holds an MCom in Economics from the University of KwaZulu-Natal (formerly the University of Natal), and obtained a PhD in Development Studies from the London School of Economics in the United Kingdom.
RethinkHIV is a consortium of senior researchers from London School of Hygiene & Tropical Medicine, Imperial College London, Harvard School of Public Health, Centre for the Study of African Economies and Blavatnik School of Government at Oxford University.
The consortium will evaluate new evidence related to the costs, benefits, effects, fiscal implications, and developmental impacts of HIV interventions in sub-Saharan Africa, in order to maximise contributions to the fight against HIV there.
The aim of RethinkHIV is to find ways of creating, optimising, and sustaining fiscal space for domestic HIV investment, as well as exploring long-term, sustainable national and international financing mechanisms. RethinkHIV is funded by RUSH Foundation.