In an era of shrinking development assistance for health, is 'spending better' a more viable strategy than 'spending more' for LMICs? Discuss.

Q. In an era of shrinking development assistance for health, is 'spending better' a more viable strategy than 'spending more' for LMICs? Discuss. (15 marks, 250-350 words)

Development Assistance for Health (DAH) peaked in 2021 and has since reversed sharply, with the OECD projecting net ODA to fall 9–17% in 2025 and health ODA by up to 40% against the 2023 baseline [1]. For LMICs facing simultaneous donor retrenchment and tight fiscal space, "spending better" is the immediate imperative — but it substitutes for higher outlays only partially.

Why 'spending better' has become the viable near-term strategy - Donor retrenchment is structural, not cyclical: for the first time, France, Germany, the UK and the US are cutting ODA in two consecutive years, with bilateral aid to LDCs and Sub-Saharan Africa projected to fall 13–25% and 16–28% respectively [1]. - Efficiency yields quick gains: allocative shifts toward primary and preventive care, plus public financial management reform to cut leakages, expand coverage without new money. - Concentrated donor risk: a handful of donors account for a majority of WHO and WFP funding, making aid-dependent budgets fragile [1]. - Proven domestic gains: India's out-of-pocket expenditure fell from 64.2% (2013-14) to 39.4% (2021-22) of total health spending as public provisioning and purchasing improved [2].

Why 'spending more' remains indispensable - LMIC public health spending is around half the UHC benchmark, and the gap with high-income countries has widened over three-fold in per-capita terms even while narrowing as a share of GDP — efficiency cannot close an absolute resource deficit. - India's own Government Health Expenditure rose from 1.13% (2014-15) to 1.84% of GDP (2021-22) [2], still short of the National Health Policy 2017 target of 2.5% by 2025 [3]. - Health systems require lumpy investment in workforce, diagnostics and pandemic preparedness that no efficiency gain can generate.

The two strategies are sequential, not rival: efficiency buys credibility and time, while domestic resource mobilisation supplies the durable base. LMICs should institutionalise outcome-linked budgeting and pooled procurement while steadily raising tax-financed health outlays toward the UHC benchmark — the surest route to SDG-3 and to health as a substantive dimension of the right to life.

(~330 words)

Sources: 1. Cuts in Official Development Assistance, OECD Policy Brief, June 2025 — 9–17% ODA fall, 40% health ODA cut, LDC/Sub-Saharan exposure, donor concentration 2. National Health Accounts Estimates for India 2020-21 and 2021-22, MoHFW/PIB — GHE 1.13%→1.84% of GDP; OOPE 64.2%→39.4% 3. National Health Policy 2017, PIB — 2.5% of GDP public health spending target by 2025