Cost Effectiveness of Health Sector Support Strategies

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Helpdesk Query:

i) benefit of providing budget support/sector budget support on health system strengthening (or system strengthening in other sectors that is relevant), leadership/coordination, service delivery, health outcomes

ii) benefit of provision of technical assistance to the health sector, particularly Ministry of Healths (MOHs) and/or executive arms of MOHs (Nepal has a Dept of Health that strengthens service delivery while MOH concentrates on policy, monitoring and evaluation, etc)

iii) focus on any cost effectiveness and/or value for money analysis of i) and ii) above

iv) any other existing review of evidence you have that is relevant


The 2005 Paris Declaration grew out of a consensus on the importance of ‘country ownership’ to the success of development efforts. In other words, it came to be recognised that the effectiveness of aid depends critically on whether or not a country’s leadership is really committed to development. There have been many reviews showing the benefits of budget support and deeming it cost effective. It has been said to provide many benefits, including enabling partner governments to increase expenditure on priority areas, provide more services, particularly in health and education, increased the capacity of partner governments to plan and deliver services effectively and to develop better poverty-focused policies, strengthen their financial management systems and good economic management.

Technical assistance has been written about as an idea of the past and shown to be ineffective and costly by many. It is seen as relatively expensive, and this has been exacerbated by tied aid. However, there are different approaches, with some being more cost effective than others, there has been a trend towards arrangements where donors pool their funds for technical assistance to improve coordination and encourage country leadership. It is often said that reliance on Western providers results in high costs, but some studies have noted that local providers are not always significantly cheaper, particularly in Africa.

The search for new aid delivery mechanisms to enhance capacity development is high on the agendas of international development cooperation agencies. The pooling of funds for technical assistance in the context of sector-wide approaches and other new aid mechanisms is one response to the increasing criticisms of development cooperation. The focus of funding and assistance has shifted from donor-driven to recipient-driven with national execution; from the use of projects for transferring technological expertise to the use of programmes for attaining human development objectives; from a sectoral focus that reflects supply to a multi-sectoral approach that responds to the country’s problems and needs and from a focus on project activities and inputs to a focus on results and impact. It is within this context that these questions need to be addressed


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