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Foreign aid may stymie home-grown healthcare spending

Deep-pocketed foreign donors encourage the governments of some poorer nations to spend less domestic cash on healthcare

DEEP-POCKETED donors are inadvertently encouraging governments to slow their health spending in parts of the developing world.

Government spending on healthcare in developing countries between 1995 and 2006 doubled to $18 billion, with one-third of these increases coming from foreign governments and aid organisations.

Christopher Murray’s team at the University of Washington in Seattle collected a range of data on health spending and then created a model to describe the relationship between foreign aid and domestic health funding.

Although domestic health spending increased overall, it fell as a proportion of total budgets. Murray’s team found that for every $1 of health aid developing countries received, they cut their own contribution by nearly 50 cents. Sub-Saharan African countries made the deepest cuts.

“For every $1 of aid, poorer countries cut their own health contribution by nearly 50 centsâ€

Meanwhile countries in Asia, Latin America and the Middle East tended to increase their own health spending along with increased aid (The Lancet, ).