Document(s) 21 of 21

The experience of the 1990s indicates that the Commission on Health Research for Development was correct in its analysis. Linked to equity, health research can be a powerful instrument for development. However, as long as market or scientific incentives are the only factors shaping health research, most breakthroughs will have little relevance to much of the world’s population.

Drawing on country experience,[1] this chapter reviews recent thinking about health, development, and research. In particular, it places health research in the context of three major insights from the 1990s. First, the final nail has been hammered into the coffin of pure “trickle-down” theories of economic growth and development. Many agree that investing in health is critical to both economic productivity and human development. Second, events in this period have vindicated pro-poor, pro-equity activists. Countries with the widest gaps between rich and poor stumble along the “low road” to economic growth and development, handicapped by their own fractured societies. A common refrain from every quarter — from Michael Camdessus, director of the International Monetary Fund (IMF), to Nobel Laureate Amartya Sen — is that inequality is bad for the economy, bad for society, and bad for individuals. They each sing a different tune about what needs to be done about it, but the bottom line is that greater equity promotes economic growth and human development. Third, the application of knowledge is central to global development. People who used to talk about “established market economies” are now talking about “knowledge-based economies” — a change that goes beyond semantics. The use of knowledge is now regarded as the dominant factor of production in rich countries, surpassing even physical capital. The message promulgated in developing countries is that the route to prosperity is to adopt technologies from the North and adapt them for local use. In this context, research (as the basis for knowledge production) assumes even greater importance than envisaged by the Commission in 1990. It is more than just a strategic tool for effecting improvements in health; it is now the driving force behind all development.

Some have predicted that the new mode of knowledge production and diffusion will be the “great equalizer,” narrowing the gaps between rich and poor. Evidence to date, however, suggests that knowledge processes, shaped by globalization, are widening income disparities. Although the motive for liberalizing trade and labour practices was ostensibly to benefit developing countries (through capital investment and knowledge spillovers), it has actually jeopardized the livelihoods of many low-skilled workers. Often the shift from labour-intensive to high-tech production processes has only made the problem worse.

Commercialization of knowledge (its conversion into a marketable commodity) has diverted human and financial resources away from the public interest — specifically, away from the concerns of the poor. Corporate intellectual property rights, embodied in multilateral agreements such as the Trade-Related Aspects of Intellectual Property Rights (TRIPs), may effectively shut out low-income countries from the knowledge-sharing characteristic of scientific discovery.

Whereas the Commission’s analysis was accurate, its optimism was misplaced. The situation today is worse than it was 10 years ago. The Commission’s report noted that only 5% of global expenditure on health research (which in 1986 was estimated at 30 billion United States dollars [USD]) was directed to research on the main health problems of 95% of the world’s population (CHRD 1990). The World Health Organization’s (WHO’s) Ad Hoc Committee on Health Research Relating to Future Intervention Options conducted a review 5 years later and found that the situation had deteriorated — only about 4.4% of all public-sector funds for health research and development (R&D) was then going to the problems of low- to middle-income countries (Ad Hoc Committee 1996). Writing for the Nation, Ken Silverstein put it more bluntly:

The drug industry’s calculus in apportioning its resources is cold-blooded, but there’s no disputing that one old, fat, bald, fungus-ridden rich man who can’t get it up counts for more than half a billion people who are vulnerable to malaria but too poor to buy the remedies they need.

— Silverstein (1999, p. 13)

Ten years down the line, then, we can say with greater confidence that investment in health is important, that equity matters, and that health research can be the foundation for better health. Yet, we cannot say that the world is better off for the strength of our convictions.

Can we improve the health of the poor in the face of a rampant international market and a preoccupation with research that only distributes dividends according to the ability to pay? A starting point in answering this question would be to understand why inefficiencies in public R&D allocations persisted through the 1990s, despite the recognition that health research can lead to substantially better health. One reason is that the international community failed to establish effective incentives to redress market failures, despite clear acknowledgment of the widespread negative effects of disease and the public good of health research. Multilateral organizations have responded inadequately to the prevalent incentives favouring R&D investment in the health of the rich, which, at the margin, produces progressively less health gain but more financial gain for both the scientist and the manufacturer. There are promising signs that this situation is about to change for the better: the new Multilateral Initiative on Malaria is an attempt to establish compelling incentives for greater public and private investment in R&D related to one of the world’s worst diseases (UNDP–TDR 1999). This blend of public and private effort may precede a new type of international research infrastructure. As the distinction between science and technology increasingly blurs, traditional divisions between funding for public health research and that for private health research are breaking down. As a result, the international health-research community has an opportunity to better integrate the efforts of public, private, and nongovernmental organizations.

Yet, international incentives on their own will not bring about the required changes, and countries need to make a far more deliberate effort to put health research to better use. A number of countries have identified national health priorities and tried to set research agendas accordingly. However, even if investments in R&D do address national priorities, they may fail to realize expected benefits if the type of research conducted does not match the country’s needs. For instance, it is not unusual for exploratory studies to dominate the research portfolios of low-income countries at times when the most pressing needs are to solve practical problems, reduce inefficiencies in existing interventions, and better allocate resources. The point is that the strategic emphasis of a country’s research portfolio should reflect an appropriate balance between short- and long-term problem-solving and between the demands of helping to develop new tools, using existing ones better, and allocating resources more fairly. Low-income countries can realize greater returns on investment in R&D by better aligning expenditures with national priorities and investing in the most appropriate types of R&D.

A helpful metaphor is to think of the national research agenda as a diversified investment portfolio that aims to maximize expected social benefit. However, even if countries adopt an investment portfolio to generate the greatest improvement in health, they will only realize the benefits if they implement research efficiently, enhancing outputs and reducing costs. To date, much of the effort has focused on supply-side strategies to enhance outputs by building up resources for R&D. Less attention has gone to improving supply through better use of existing resources. Even more significant is the neglect of strategies to stimulate a demand for research, although they hold the key to substantial gains in efficiency. We are also seeing a growing awareness of the costs of some research being unnecessarily high, particularly in communicating information. Reducing these costs can substantially increase returns on investment in research.

For low-income countries, returns should be defined in terms of a better health status for those who need it most. Although R&D helps to stimulate a country’s educational system and may in the long term contribute to economic productivity, these welfare effects are insufficient to justify investments in health research. Faced with considerable unmet basic needs, a country can only justify research if it leads to better health now.

By the end of the 1980s, the trickle-down–bottom-up debate had already lost steam, overtaken by mounting evidence (from failed structural-adjustment programs) that pure trickle-down strategies do not bring about the productivity gains expected, let alone reduce poverty. As a result, in the 1990s development thinkers adopted a more sophisticated theory, expressed in terms such as “structural adjustment with a human face,” “high-quality economic growth,” “smart growth,” and “human development,” terms coined by multilateral organizations. Regardless of ideological standpoint, the bottom line was clear. Without strategies to promote health, education, and economic security for the poorest people, efforts to foster productivity growth would be unlikely to bring about sustained national development.

The development community learned this hard lesson at the expense of the poor. Conventional wisdom held that productivity growth would significantly reduce extreme poverty. For instance, World Bank econometric studies projected that a 3% rate of growth per capita would typically bring about a 6–10% reduction in the proportion of the population living on less than 1 USD/day. Yet, a 1994 comparison of trends in 44 developing countries found that global poverty fell only slightly after 1980, despite positive growth rates overall (Ravallion 1995). The incidence of absolute poverty in the developing world remained static in the latter part of the 1980s, with one in three people living on less than 1 USD/day, and two in three living on less than 2 USD/day. In absolute numbers, poverty was generally rising in Latin America and sub-Saharan Africa, although the incidence was generally falling in Asia (Chen et al. 1994).

In South America and Africa, IMF economists were left scratching their heads about why policy advice had failed. In an article in the IMF journal, Finance and Development, Senior Policy Advisor Susan Schadler (1996, p. 14) wrote, “the most striking gains were on the external accounts; developments in the key domestic targets — inflation, investment and growth — were less impressive.” If the key domestic targets of inflation, investment, and growth were less than impressive, the impact on the poor was disastrous. The economies of many countries contracted, reducing access to social services and further impoverishing the poorest people.

Worse still, the benefits of belt-tightening predicted for the “post-recessionary phase” of structural adjustment often failed to materialize. As Susan Schadler (1996, p. 16) observed, “for most countries outside Central Europe, there was some strengthening of growth and, on average, an increase in savings ratios. Still, no country shifted to a distinctly more rapid pace of growth backed by higher savings.” Even where growth occurred, the poorest people were often worse off than before structural adjustment. In Argentina, Brazil, Chile, Uruguay, and Venezuela, structural adjustment was associated with greater income concentration. Subsequent growth in the recovery phase did not necessarily restore income distributions to their former patterns. In fact, only Columbia, Costa Rica, and Uruguay (and possibly Mexico) returned to the lower, preadjustment levels of inequality (Altimir 1994). “Time,” said the development pundits, “for a rethink.”

For neoclassical theorists, this rethink meant elaborating on the importance of “human-capital formation” as a determinant of economic growth and human development. In the health sector, the landmark reference was the World Development Report 1993, which argued that a high burden of disease constrains economic growth by limiting human capital. Developing-country governments should, therefore, see efficient health-sector spending as an investment, rather than as a consumption item (World Bank 1993).

For human-development activists, in contrast, achieving good health was an end in itself and a good development outcome. The publication of the first United Nations Development Programme human development report, in 1990, gave credence to the efforts of development advocates over the previous 50 years. No longer was development synonymous with economic growth. In future, we would gauge national development on the basis of people’s health and educational status, nutrition, poverty alleviation, security, human rights, and protection of vulnerable groups. Grass-roots activists felt vindicated: their efforts were contributing to human development — they were not merely providing relief and mopping up at the bottom of the pile of humanity (UNDP 1999).

At the other end of the decade, in 1998, the award of the Nobel Prize for Economics to Amartya Sen signalled a different form of support for an expanded definition of human development. His central argument is that development depends on the fulfillment of every person’s individual capabilities (Sen 1999a). The persistence of inequality therefore acts as a brake on human development, and efforts to foster equality of human capability act as a stimulus.

Irrespective of ideology, commentators have agreed that investing in health is critical to both economic growth and human development — no stunning revelation to the people of low-income countries. In Côte d’Ivoire and Ghana, for example, 15% of the per capita gross domestic product (GDP) was lost to illness even before the impact of HIV and AIDS. Malaria and HIV–AIDS are probably the most obvious diseases undermining economic growth and human development. In countries like Tanzania, spatial patterns of poverty mirror the distribution of malaria, and the World Bank estimates that the direct and indirect costs of malaria in Africa stand at more than 2 billion USD/year. HIV–AIDS has substantially damaged economies in sub-Saharan Africa by increasing dependency ratios and diverting public expenditures from growth-enhancing investments. By 1989, the management of AIDS-related illness accounted for almost 70% of government health expenditure in Rwanda and more than 40% in Tanzania (Shaw and Elmendorf 1994). Economist Jeffrey Sachs pointed out that only three of the world’s low-income countries lie outside tropical and subtropical zones, prompting his assertion that the best public-health intervention ever invented is the season of winter (Sachs 1999). This is not to say that Sachs implies defeat for low-income countries in the face of overwhelming odds. Breakthroughs against river blindness (onchocerciasis) in the 1990s have renewed optimism in the prospect of conquering other infectious diseases. We can achieve much more with better use of existing interventions — appropriate allocation of resources and greater operational efficiency (Ad Hoc Committee 1996).

At the beginning of the 21st century, the key message is that investments in health do not divert resources from the “productive sectors of the economy” but form part of the foundation for economic growth and human development.

How does health contribute to economic growth and human development? The World Development Report 1993 (World Bank 1993) saw investment in the health sector as a way to reduce inefficiencies by bolstering aggregate levels of human capital. It saw improvements in health for poor people as a route to poverty reduction, by enhancing their ability to engage in economically productive activities.

An insight that has gained broader recognition in the 1990s is that it is not only the extent of poverty that matters, but its distribution as well. The implication is that strategies to reduce poverty should aim to narrow the gaps between rich and poor and not merely increase aggregate levels of productivity. Conventional economic theory has been turned on its head by evidence that high levels of income inequality constrain economic growth. Traditional views maintained that high inequality is an inevitable feature of some phases of national development (Kuznets 1955) or even that income inequality acts as an incentive for greater productivity (Garcia-Peñalosa 1995; Welch 1999). However, both econometric analyses and regional and country case studies have produced strong evidence that greater income equality promotes economic growth. For instance, greater equality has been a consistent explanatory factor in the economic success of East Asian countries, in contrast to the slower growth in Latin America and the Caribbean. East Asia had lower initial income inequality, and it had equity-oriented strategies of high investment in education and health, which paid handsome returns (Birdsall and Jaspersen 1997).

There is also growing evidence that at least part of the persistence of poverty in many countries is due to high levels of income inequality. Regression analyses have shown that initial income distribution is a good predictor of the rate of poverty reduction. A country with a low Gini index[2] (0.25) can expect a 33% drop in poverty rates as a result of a 10% mean per capita increase in gross national product (GNP), whereas similar economic growth in a country with high inequality (Gini 0.6) will reduce poverty by 18%. In fact, rates of poverty change are even more elastic to rates of change in the Gini index than mean per capita income: elasticity of poverty to the Gini index was found to be 3.86 (Bruno et al. 1998). In other words, seemingly modest changes in overall inequality can achieve a sizable change in the incidence of poverty.

Londoño and Széleky (1997), of the Inter-American Development Bank, argued that poverty in Latin America and the Caribbean is largely a problem of distribution, not of absolute insufficiency. In 1982, when the average Gini index for countries in the region was at its lowest, the incidence of poverty declined by nearly 2% for every 1% increase in per capita GNP. By the 1990s, the average Gini index was much higher, and elasticity of poverty to economic growth had declined: a 1% improvement in GDP reduced poverty by only 1.3%. The authors asserted that if Latin American and Caribbean countries had the income distribution of Eastern Europe or South Asia, they would virtually eliminate both extreme and moderate poverty.[3]

Simple mathematics explains the positive relationship between greater income equality and higher rates of poverty reduction. Given any positive rate of growth that is roughly uniform across all levels of income,[4] the poor will gain less (in absolute terms) than the rich. Higher inequality implies that the poor must have a lower share of the total income and its increment through growth, and at maximum inequality (Gini index of 1.0) absolute poverty would be unresponsive to growth (Ravallion 1997).

Greater income equality promotes poverty reduction through other channels as well. These include a stronger political voice for those at the bottom of the income distribution and a weakening of the social stratification that traps poor people in the vicious cycle of low human capital and income (Bénabou 1996). “Polarization” is the growing concentration of very rich and very poor, and this appears to be the type of inequality that most constrains poverty reduction (Wolfson 1994; Ravallion and Chen 1997). This phenomenon has appeared at a global level in the concentration of the world’s wealth in established market economies and the declining share of it in developing countries. Within many developing countries, the rich are getting (relatively) richer and the poor are getting (relatively) poorer.[5]

Another important insight of the 1990s is that it does not have to be this way. Some countries chose to systematically reduce inequality and poverty and prospered nevertheless. A review of 63 surveys from 1981 to 1992 (involving 44 countries) showed no systematic relationship between economic growth (independent variable) and income inequality (dependent variable). Countries were evenly divided between those in which growth came with rising inequality and those in which inequality fell with growth (Bruno et al. 1998). This finding suggests that government policies, rather than economic growth per se, determine distributive outcomes. Economic contractions have typically come with rising inequality, as seen in the recessive adjustments in Latin America and sub-Saharan Africa in the 1980s. But the right sort of government action can mitigate even this effect, as case studies from Latin America have shown. Altimir (1994) pointed out that countries consistently incorporating equity objectives into their policy designs restored lower levels of inequality, even in the recessive adjustment phase.

For advocates of human development, the maximization of the capabilities of every individual is a goal in its own right. They would argue that the painstaking (neoclassical) economic justification for a commitment to equity is unnecessary; nevertheless, it is once again relevant that many theorists and activists of diverse persuasions have converged on the same bottom line, namely, that equality is good for both economic growth and human development.

A third insight from the 1990s arises from the evolution of “knowledge-based economies,” with advances in information and communication technologies (ICTs) effectively breaking down national borders and radically altering power relationships between nation-states and global authorities. Some envision access to knowledge as the key to economic growth and human development.

Could the changes occurring with globalization in the 1990s have enabled low-income countries to “leapfrog into the 21st century”? Certainly the separation of finance from production suggests the possibility of massive injections of foreign capital into struggling economies; however, in practice international capital only flows among industrialized countries and a handful of lower-income ones (Bosworth and Collins 1999). Perhaps more importantly, many economists now regard the use of knowledge as a major factor in global productivity. Some have viewed the changed basis for economic growth as an unprecedented opportunity for developing countries: “regardless of current capabilities, individuals, firms, and countries will be able to create wealth in proportion to their ability to learn” (Johnson 1994, p. 23). Developing countries can now harness knowledge from anywhere in the world.

In the 1990s, economists and development theorists saw the use of knowledge not only as a way of promoting economic growth but also as a way of bringing about better social outcomes. For instance, the World Development Report 1998/99 saw Costa Rica as a country achieving better than expected health, and to explain this it cited the country’s policy of systematically disseminating and using health-promoting knowledge (World Bank 1999). In the words of innovation guru Peter Drucker, “the comparative advantage of less developed countries no longer lies in lower labour costs, but in the application of knowledge” (Drucker 1994, p. 53).

Yet, the role of knowledge in productivity growth and human development fits uncomfortably with neoclassical economic theory. For one thing, productivity growth occurs with human- and physical-capital accumulations, but independently of the invention of new technologies (Rebelo 1998). For another, the relationship between the application of knowledge and productivity growth seems to change over time (Nelson and Winter 1982). Innovation theorists have also been quick to point out the shortcomings of thinking of knowledge as a tangible asset. Miller and Morris (1999) argued that knowledge exists only in people and has to be converted into new capabilities to bring about technological change, and Pfeffer and Sutton (2000) dismissed the notion that knowledge can be built up as capital stock, suggesting that it only has meaning when applied. McDonald (1998) maintained that, in the long run, the ownership of knowledge undermines the potential for discovery and innovation. Despite its uneasy fit, neoliberal theorists have conferred on knowledge a sense of fungibility — implicit in terms like “knowledge capital” and “knowledge spillovers” — consistent with the privatization of knowledge and the trade in knowledge as a commodity.

Furthermore, the “knowledge-capital” metaphor has reinforced the belief that free trade and foreign investment benefit developing countries. Some consider such activities good not only for productivity growth but also for knowledge transfer as a basis for economic and social development. Coe et al. (1997) found significant R&D spillovers from industrialized to low-income countries with low R&D capacities. Coe et al.’s regression analyses showed that on average a 1% increase in R&D capital in industrialized countries raised productive output in developing countries by 0.06%. Interestingly, though, the spillover effects occur mainly with arm’s-length agreements, and there is little evidence that foreign direct investment promotes any efficiency gains through domestic innovation (Kholdy 1995; Navaretti and Carraro 1996). In other words, more knowledge-sharing and higher returns occur in low-income countries when foreign firms subcontract local experts than when the local experts are assimilated by the R&D machinery of subsidiaries.

Treating knowledge as a sellable commodity has also further accelerated the vertical integration of transnational companies trying to exercise proprietary control over every aspect of R&D and production. This is particularly true of the pharmaceutical and biotechnology industries within the health sector (Pisano 1991). Foreign firms have therefore had a stronger incentive to provide direct foreign investment than to establish arm’s-length agreements in developing countries.

Low-income countries face a dilemma. Foreign investment has clear benefits in terms of economic growth and access to new technologies, but foreign investment usually follows the removal of domestic trade protections, which is not necessarily good for a country. Open trade facilitates the entry of transnational corporations into low-income countries, often at the expense of those with domestic innovative capacity. Liberalization has jeopardized the livelihood of many low-skilled workers and strengthened the hand of the intellectual and business elites in developing countries, particularly when liberalization means the removal of international trade barriers and the adoption of free-market approaches to labour supply. In consequence, it has often increased income and health inequalities, exacerbated by unequal access to ICTs (Lensink 1996; Ngwainmbi 1999).

Temple (1999) found it easy to envisage a hypothetical long-term equilibrium, in which developing and developed countries grow at the same rate after the developing ones have caught up by adopting technologies from abroad and investing in physical capital and education. But in fact, differences in rates of efficiency growth have widened between developed and developing countries over the past 30 years. We should look far more closely at our explanatory model before applying standard templates to low-income countries. Even if “knowledge capital” is only an analogy, we immediately run into trouble in trying to explain how the application of knowledge leads to economic growth and human development, because sometimes it fails to do this.

Impressed with high returns on investment in R&D in knowledge-based economies, some theorists have called for increases in developing countries’ own levels of investment in R&D to enable them to fully assimilate new technologies. Much of the evidence for the theory linking R&D to productivity growth has come from countries at the forefront of the technological frontier, and there is little to suggest that developing countries can achieve the same economic returns. In the words of Nobel Laureate and economist Theodore Schultz, “even to be a free-rider requires a high level of scientific competence” (Schultz 1985).

In fact, R&D activities only seem to feature as factors of productivity once a country attains a threshold of economic prosperity. Using cross-country growth regressions, Birdsall and Rhee (1993) found R&D activity (expenditure) and economic growth positively correlated, but only across countries in the Organisation for Economic Co-operation and Development (OECD). (Even for OECD countries, there is no evidence that R&D activity causes growth.) In Birdsall and Rhee’s study, R&D activities and per capita income showed a strong correlation, suggesting that R&D only gains in economic prominence once a country reaches a certain level of economic development. This is not to say that investment in R&D is unimportant in low-income countries as an impetus to advance science and education and address country-specific concerns. It does suggest, however, that the level of investment in R&D is an equilibrium state arising from both trade-offs and a complementarity with resources allocated to more basic needs. On its own, higher R&D expenditure in low-income countries is unlikely to accelerate economic growth or reduce poverty. We have little evidence to support the notion that the transfer of knowledge capital from countries in the North is somehow a shortcut to economic growth, substituting for other scarce factors of production. For low-income countries, a preoccupation with imported technology can, in fact, divert attention from the real challenge of putting local knowledge to work on improving social and economic outcomes.

This point is illustrated in the R&D portfolio Tanzania developed to meet its health priorities (see Figure 3.1). At a 1999 national priority-setting meeting, where research topics were scored in terms of priority, participants proposed that the bulk of national research effort be directed to achieving greater efficiency of resource use (46.5%) or to improving equity of resource allocation (17.6%). They felt that less than a fifth (16.5%) of the national effort should focus on new-product development (Kitua 1999).

Figure 3.1. The Tanzanian health-research portfolio (placing greater emphasis on equity and efficiency).
Note: HIV is not covered under STI. STI, sexually transmitted infection; URTI, upper respiratory tract infection.

For the most part, developing countries require no new foreign technologies to improve equity of allocation and efficiency of use. WHO’s Ad Hoc Committee (1996) made the same point. For many health priorities — such as acute watery diarrhea, tuberculosis, and pneumococcal infection — we would achieve the greatest gain at the margin by identifying and responding to inefficiencies in resource allocation and implementation (Ad Hoc Committee 1996). The main problem in addressing other health priorities is that the most efficacious interventions available are not cost-ineffective in low-income settings. However, local innovation can change the cost-effectiveness ratio, and developing countries can, themselves, certainly learn from each other’s adaptations. Further, given existing technologies, a proportion of the current burden of disease is unavoidable, and to develop new interventions would require a global effort. The main reasons for persistently high levels of the most important diseases in low-income countries are failure to use existing tools efficiently and failure to allocate resources equitably. Sometimes, achieving greater efficiency simply requires political will and action. But often the technical inefficiencies and disparities in health status and distribution of resources need to be demonstrated. This knowledge can make the biggest difference in low-income countries.

Looking for foreign answers to these country-specific questions often leads developing countries to adopt inappropriate technologies and diverts even more of their resources away from their biggest problems. Foreign answers tend to be more capital and skills intensive and larger scale, require more foreign exchange and more advanced infrastructure, and often lead to cost-ineffective products (Streeten 1991). All this suggests that low-income countries can achieve the greatest gains using their own local knowledge and technology. Harnessing knowledge from foreign sources is an important but secondary objective, which is not to suggest that low-income countries would have no need to exchange ideas and technologies — it is a question of emphasis and the ways foreign technologies can boost local initiatives.

In this regard, the corporatization of intellectual property rights is an insidious threat to low-income countries, making it increasingly difficult for these countries to gain access to external information and contribute to global initiatives. The TRIPs agreement — administered by the World Trade Organization — requires signatories to apply the same principles to intellectual property protection as those governing trade between most-favoured nations. It establishes minimum standards of protection of intellectual property (including copyrights, trademarks, and patents), and it shifts bargaining power away from users of knowledge to those who generate it (often transnational corporations). As currently structured, it forces low-income countries to pay market prices for new information (UNDP 1999). This agreement has effectively pushed up the cost of acquiring information and has, indeed, been used to restrict low-income countries’ access to cheaper health technologies, as when the United States was trying to restrict South Africa’s access to cheaper medicines.

In many countries, rising costs have come with a decline in government expenditures on research. In Lithuania, for instance, the transition to a market economy has meant slashed public funding for health research. Almost all funds go to researchers’ salaries and institutional overhead, and the research community in Lithuania is essentially in a “holding pattern” until the economy improves and more money is available for direct research expenses (Grabauskas 2000).

Much of the talk about the short-term benefits of global knowledge to low-income countries is more hype than substance, and the call for developing economies to “adopt, adapt and prosper” rings hollow for all the reasons given above. For most developing countries, the hope of fast-track development, or leap-frogging into the 21st century, is naive; slow but sure economic growth, accompanied by steady improvements in education and health, would be the most realistic basis for long-term development. Despite this modest projection, it is important not to lose sight of the real potential to improve health through knowledge-sharing and application. Research that really comes to grips with the specific health problems of developing countries and local communities can be a powerful instrument for development based on equity.

Investing in health is important, equity is important, and health research attuned to the specific needs of each country can improve health and promote development. The challenge for each country will be to ensure that its research aims for the maximal benefit of its people.

[1] Country examples are based on case studies developed as part of the Health Research Profile Project (see Box 3.1, under “Getting the most out of investments in health research”).

[2] The Gini index is a measure of income inequality, based on the cumulative share of total income owned by a cumulative proportion of the population.

[3] Extreme and moderate poverty are defined as per capita consumption of less than 1 and 2 USD/day, respectively.

[4] A reasonable assumption, as there is virtually no correlation between economic growth and inequality in analyses across countries (Ravallion 1997).

[5] This phenomenon is not necessarily detected by the Gini index but is demonstrated using the Wolfson coefficient of polarization (Wolfson 1994; Ravallion and Chen 1997).

[6] See Figure A3.1, which presents a diagram and notes “mapping” the relationship between health research and development.

Document(s) 21 of 21