Do Not Let the Tail Wag the Dog: Connecting National Income Measures to Aid Is Misleading

This article is a response to “From lemming to leader: Moving beyond Gross Domestic Product (GDP) to bring health financing assistance into the 21st century“.

Nassiri-Ansari et al. argue that criteria based on gross domestic product (GDP) and gross national income should not be used as measures to allocate global health aid as they mask inequalities within and between countries. They suggest that there are viable alternatives and highlight two in particular: the Aotearoa New Zealand’s Living Standards Framework and the Oxford Poverty and Human Development Initiative’s Multidimensional Poverty Index. They state that “calculating them requires reliable, available, and timely data,” among other conditions. And, finally, they urge that change must happen now, well ahead of the 2030 deadline for the Sustainable Development Goals (SDGs).

As a measure of the income or wealth of countries, GDP has been used for decades, and has become a one-size-fits-all measure of what countries own. Indeed, GDP has been criticized for not including the value of many of the resources owned by countries, and is biased against countries rich in natural resources. We agree with the authors about the need to move away from such one-size-fits-all approach to measuring national income. Indeed, two of us argued in Fan et al. that GDP should be used alongside complementary indicators.

However, we feel that their proposal of two alternative replacements for GDP is premature. Such proposal also shifts the focus away from the underlying bottleneck that prevents proper valuation of the true worth of countries: weak data systems. Many low- and middle-income countries (LMICs) have weak data infrastructure and systems, impeding the proper identification and collection of data on some economic activities. In addition, many LMICs have very large informal sectors with poor data records, making it hard to value the activities of such sectors. These challenges affect not only the computation of incomes and estimation of economic growth, but also other important indicators such as health expenditure. It has, thus, become a common feature to rely on modelled estimates, some of which lack context and reality, while the world looks away from strengthening country data systems to produce more reliable data. Today’s data systems simply do not meet the criteria of reliability, availability, and timeliness to switch to an alternative. The United Nations and the Global Partnership for Sustainable Development Data highlight the significant gaps in investments in data and the potential high returns on investments in data infrastructure and ecosystem. This is where our focus should be – to invest in data systems and use, such that we can confidently track progress against the SDGs, and ensure that data exist to consider appropriate alternatives in the post-SDG world.

More fundamentally, we are concerned by the implicit argument set forth by the authors that more development assistance for health (DAH) is the solution. The authors highlight a call made in an earlier paper by three authors of this piece that “Estimates suggest that it will cost LICs and MICs an additional US$371 billion per year in health spending by 2030 to reach the health-related SDG target”. Nassiri-Ansari’s et al. further argue that “…SDG 3 is only achievable if sufficient health aid is allocated to the vast majority of the world’s poor, who are residents of MICs.” We disagree that the health targets of the SDGs can only be met with increased aid, and we are concerned that this notion gives the impression that health aid is “the savior of poor people”. For context, annual DAH rose to its highest ever level in 2021, when it was US$84 billion, driven by the COVID-19 pandemic, and it has fallen since then. Given that US$84 billion was a historical high, it is not feasible to argue that DAH will ever reach US$371 billion per year. In contrast, Yamey et al. argued that “most of this additional spending will have to come from domestic sources”.

The proposition set forth by Nassiri-Ansari’s et al. assumes that the rational path to success lies in progressing from the Millennium Development (MDGs) to the SDGs, then to the next post-SDG targets. Implicit in that scenario is the perpetuation of global compacts that are supposedly owned by all countries but which, in reality, are crafted by a select few in the capital cities of high-income countries and foisted on LMICs.

When global entities operate in that fashion, they deny LMICs the right and opportunity to evolve their own approaches, which are likely to be more viable and durable than what comes from thousands of miles away. It is time to jettison that approach and think differently. A recent paper by two authors of this piece calls for “African leaders to rise to the occasion by taking responsibility.” It also argues that global health financing mechanisms and other health aid initiatives risk impeding improvements in domestic financing of health in LMICs of Africa­—a perspective that is relevant to LMICs in other continents. Furthermore, Nassiri-Ansari’s et al.’s approach does not acknowledge the potential for more viable options for increasing spending on health. For instance, a recent report by the World Bank found that officially-recorded remittances to LMICs reached US$656 billion in 2023, with US$54 billion going to Africa. Again, UNCTAD estimates that each year, Africa loses more than $88 billion to illicit financial flows through capital flight from the continent. Might there be more realistic opportunities for financing health, besides DAH?

In summary, we agree with Nassiri-Ansari’s and colleagues’ call to improve the measurement of income or wealth of nations, including at the sub-national level. But in the authors’ urgency to dismiss GDP/GNI, we feel they have failed to consider the prevailing weaknesses in national data systems that would apply to any alternatives. Equally, we believe the authors, in critiquing GDP/GNI measures, have over-emphasized the role of DAH; this is the tail wagging the dog. We call for a renewed focus on strengthening data systems. We neither expect nor support a call for more spending on aid for basic health services in LMICs. As we have argued in previous publications by Nonvignon et al. and Yamey et al., LMIC governments should focus on increasing domestic spending and improving the efficiency of such spending; spending on critical, basic health services should be the responsibility of LMIC governments. Aid should be targeted toward global public goods and to support the delivery of essential health services in fragile or particularly weak states. We should not focus on calls that continue to make aid the “savior” of LMIC populations while entrenching the power of global health financing institutions and philanthropists who are not politically accountable to those populations.