{"id":207,"date":"2007-11-19T01:04:59","date_gmt":"2007-11-19T06:04:59","guid":{"rendered":"http:\/\/blogs.law.harvard.edu\/politicshiv\/2007\/11\/19\/the-disbursement-gap\/"},"modified":"2007-11-19T02:52:50","modified_gmt":"2007-11-19T07:52:50","slug":"the-disbursement-gap","status":"publish","type":"post","link":"https:\/\/archive.blogs.harvard.edu\/politicshiv\/2007\/11\/19\/the-disbursement-gap\/","title":{"rendered":"The Disbursement Gap II."},"content":{"rendered":"<p>In thinking about President Bush&#8217;s request to extend PEPFAR&#8217;s life for another 5 years and an additional $30 billion, I&#8217;ve come across some data that suggests the U.S. is having disbursement problems. While I don&#8217;t think this will pose a problem for PEPFAR reauthorization in the short run, I wonder if these problems are unique to the U.S. and what is their origin. I blogged about it <a href=\"http:\/\/blogs.law.harvard.edu\/politicshiv\/2007\/09\/02\/us-aids-funding-disbursement-gap\/\">before<\/a> and Kim Yi Dionne of UCLA suggested bureaucratic delays might be partially responsible.<\/p>\n<p>According to <a href=\"http:\/\/www.kff.org\/hivaids\/internationalfinancing.cfm\">data<\/a> from Jennifer Kates of the Kaiser Family Foundation:<\/p>\n<ul>\n<li>In 2006, the U.S. committed $2,631.7mn for bilateral and multilateral HIV\/AIDS programs in the developing world and disbursed $1,589.8mn (a disbursement level of 60.4%).<\/li>\n<li>In 2005, the U.S. committed $1918.7mn and disbursed $1095.0mn (a level of 57%) .<\/li>\n<\/ul>\n<p>In conversations with some other folks who work on this issue, colleagues suggested this was not unique to the United States. Other bilateral donors may be experiencing this problem. The Global Fund was identified as also potentially suffering from a disbursement gap.<\/p>\n<p>I first looked into Canadian and UK patterns of disbursement, and it doesn&#8217;t appear that they have those problems. Of course, the Canadians aren&#8217;t giving nearly as much, though I suppose it could be a lot for them. The British come closer in terms of volume and given the size of their economy, it is pretty substantial.<\/p>\n<p>When I look at Jennifer Kates&#8217; data on 2005 and 2006, DFID and Canada disbursed all that they pledged for bilateral giving. Canada&#8217;s bilateral pledges\/disbursements were $107.1mn and $63.1mn in 2005 and 2006 respectively. The UK bilateral pledges\/contributions were $637.1mn and $779.6mn in 2005 and 2006 respectively. The only other major bilateral donor that faced a disbursement gap was the Dutch. In 2006 they pledged more than $900mn and only disbursed $345mn.<\/p>\n<p>As for the Global Fund, it has made agreements of grants of nearly $7.6bn since inception and disbursed about $4.6bn (a disbursement level of 61%). There is considerable variation by region with southern, western, and Central Africa&#8217;s 57.6% disbursement level and large proportion of overall grants (about 30%)  driving the average down. See here for <a href=\"http:\/\/www.theglobalfund.org\/en\/funds_raised\/commitments\/\">data<\/a>.<\/p>\n<p>What accounts for this disbursement gap? The Global Fund website suggests this is normal:<\/p>\n<blockquote><p>Disbursements will always lag behind commitments. The Global Fund follows a performance-based approach to grant-making. This means that additional funds are not disbursed until evidence of progress has been seen. Disbursements are typically made on a quarterly basis.<\/p><\/blockquote>\n<p>Cynics might suggest the $15bn and the $30bn figures are designed for maximum political effect with few able to gauge and monitor the actual disbursement levels. I wouldn&#8217;t doubt that the President is hoping to achieve some positive press for a now politically popular cause, but the more tricky issue which could bedevil attempts to ramp up spending in the future is absorptive capacity.<\/p>\n<p>Michael Bernstein of the Center for Global Development <a href=\"http:\/\/www.cgdev.org\/content\/opinion\/detail\/13035\/\">suggests<\/a> this may be a huge barrier to getting more money dedicated to this problem:<\/p>\n<blockquote><p>A major barrier to moving money more quickly is the limited capacity in recipient countries. Many countries with large AIDS epidemics historically spent little on health, so a sudden inflow of large sums cannot be easily absorbed. Donors disbursement policies can exacerbate the problem, making it harder for recipients to manage AIDS funds.<\/p><\/blockquote>\n<p>He provides this <a href=\"http:\/\/blogs.law.harvard.edu\/politicshiv\/files\/2007\/11\/snapshot-2007-11-18-23-59-39.gif\">graphic <\/a>which shows the rapid increase in donor financing for HIV\/AIDS efforts from PEPFAR, the Global Fund, and, to a lesser extent, the World Bank. He notes that:<\/p>\n<blockquote><p>The new resources provided by the &#8220;big three&#8221; funders represent a huge increase in funds at the country level. In Uganda and Ethiopia, once AIDS money began flowing from all three funders in 2004, the amount of money provided quickly approached (and by 2005 had exceeded) the governments&#8217; 2003 budgets for the entire health sector.<\/p><\/blockquote>\n<p>He emphasizes the difficulty of complicated reporting requirements that vary by donor, and the amount of time it takes to get proposals through. He also details the vagaries of the way in which PEPFAR agreements of various forms take shape with recipient countries. Bernstein recommends more flexibility in how donors allow funds to be spent.<\/p>\n<p>In any case, this is an interesting area. Some of my colleagues suggest rescinding U.S. restrictions on prevention spending would enable the U.S. to spend more (<a href=\"http:\/\/www.kaisernetwork.org\/Daily_reports\/rep_index.cfm?DR_ID=36429\">rules <\/a>requiring 2\/3 of prevention funds be spent on faithfulness and abstinence, restrictions on talking with sex workers). Since prevention is only a piece and a smallish piece of U.S. HIV\/AIDS spending (20%), I wonder if flexibility post-reauthorization would provide all that much cushion in the U.S. ability to disburse more.<\/p>\n<p>I think the real challenge is what happens if donors (even partially) make good on their commitments at Gleneagles to provide universal access to treatment by or near 2010. The UNAIDS <a href=\"http:\/\/www.unaids.org\/en\/MediaCentre\/PressMaterials\/FeatureStory\/20070925_Resources_needs.asp\">study<\/a> on the costs of scaling up, not only for treatment but prevention and care, are quite large, requiring a doubling to quadrupling of current flows, as I blogged about <a href=\"http:\/\/blogs.law.harvard.edu\/politicshiv\/2007\/09\/27\/global-fund-replenishment\/\">here<\/a>.<\/p>\n<p>The absorptive capacity issues will likely loom even larger in the months and years to come, which could be problematic for donor&#8217;s willingness to foot a larger assistance program.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In thinking about President Bush&#8217;s request to extend PEPFAR&#8217;s life for another 5 years and an additional $30 billion, I&#8217;ve come across some data that suggests the U.S. is having disbursement problems. While I don&#8217;t think this will pose a problem for PEPFAR reauthorization in the short run, I wonder if these problems are unique [&hellip;]<\/p>\n","protected":false},"author":710,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1107],"tags":[],"class_list":["post-207","post","type-post","status-publish","format-standard","hentry","category-politics-and-policy"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/archive.blogs.harvard.edu\/politicshiv\/wp-json\/wp\/v2\/posts\/207","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/archive.blogs.harvard.edu\/politicshiv\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/archive.blogs.harvard.edu\/politicshiv\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/politicshiv\/wp-json\/wp\/v2\/users\/710"}],"replies":[{"embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/politicshiv\/wp-json\/wp\/v2\/comments?post=207"}],"version-history":[{"count":0,"href":"https:\/\/archive.blogs.harvard.edu\/politicshiv\/wp-json\/wp\/v2\/posts\/207\/revisions"}],"wp:attachment":[{"href":"https:\/\/archive.blogs.harvard.edu\/politicshiv\/wp-json\/wp\/v2\/media?parent=207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/politicshiv\/wp-json\/wp\/v2\/categories?post=207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/archive.blogs.harvard.edu\/politicshiv\/wp-json\/wp\/v2\/tags?post=207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}