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Stanford researchers say evidence doesn't support claims that international health aid is wasted

Retraction: In June 2012, Stanford researchers Rajaie Batniji and Eran Bendavid retracted the research findings explained in the following article.

Their findings, presented in the essay, "Does development assistance for health really displace government health spending? Reassessing the evidence," contained errors in statistical model choice and reporting. The essay was published May 8, 2012, by the journal PLoS Medicine.

The researchers erroneously concluded that there was no significant displacement of foreign aid. When they discovered their mistake, they informed editors at PLoS Medicine and moved to correct the record. The editors agreed with the need for the retraction and accepted the authors’ explanation of their error. The retraction can be read at PLoS Medicine.

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In 2010, a study published in the Lancet concluded that a substantial portion of the money provided to developing countries for administering health-care services wasn't used as intended. The findings raised questions and sparked debate about whether international aid could, in some cases, actually harm health systems.

But the evidence underlying the argument that foreign aid for health may lead to a diversion of government funds from that country's health sector is unreliable and should not be used to guide policy, according to a paper by two Stanford researchers published in PLoS Medicine.

Rajaie Batniji, MD, PhD, and Eran Bendavid, MD, decided to re-analyze the data used in the Lancet study after meeting with policymakers who pointed to the findings as a cautionary tale of foreign governments that waste and mismanage money earmarked for health programs. As described in a recent article in the Stanford Report:

Taking a fresh look at the same numbers used for the 2010 study – public financing data culled from the World Health Organization and the International Monetary Fund – the researchers saw a different story emerge about the use of foreign aid in the health sector.

Once Batniji and Bendavid excluded conflicting and outlying data, such as huge discrepancies between WHO and IMF estimates and information about countries that were getting very small amounts of money from other countries, "There was no significant displacement of foreign aid," Bendavid said.

The Stanford researchers' findings are poised to influence a debate among policymakers and donors over whether it's more efficient to give international assistance slated for health spending to government agencies or NGOs.

"We want to free donors of feeling that if they give money directly to governments, the money will be offset and used for an unintended purpose," Batniji said. "The concern about displacement really amplifies the demands we make on governments for how they use the money. And that is at odds with a recent movement to let foreign governments set their own agendas for how to spend money."

Photo by UK Department for International Development

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