So how did you get here?
I grew up outside the U.S. because my parents were foreign service officers. So I lived in Cuba, Mexico, Argentina, Russia. Seeing so much inequality, terrible poverty next to extreme wealth, made me feel I wanted to do something about it.
My junior year of college I took a class with Rob Northrup, one of the oral rehydration salt fathers. The worms were covered, the kissing bug, Chagas was covered. It was that great combination of disgusting and a terrible injustice—but something could be done about it.
You spent 14 years at the Inter-American Development Bank, where you designed and evaluated public sector health schemes, including one of the first conditional cash transfer (CCT) programs after Oportunidades and Bolsa Escola, in Colombia. Why are CCTs so hot in Latin America?
The thing that’s so powerful about CCTs is that you can see the effect in six months, in one year. You go to these communities that initially have poor nutrition and mediocre supply, then you go back a year later, and people are better off. I mean, it’s a visible change.
CCTs have also been measured with rigorous impact evaluations, which was pretty cutting edge at that time. Now everybody does it but at that time people were not doing this in a widespread way.
Is it a change that lasts?
In Latin America there is already hangover from CCTs. Now they say things like: it’s not sustainable, the incentives to expand are too great, it’s an entitlement. I think if we are going to continue to use cash incentives we have to nuance them to get the different kinds of results that we would like to see. But because CCTs help with young child nutritional status and vaccination, and there is some evidence on low birth weight, they do have a permanent effect at least on that cohort that you’ve benefited.
I’m convinced that cash transfers for extremely poor families are really good if you want a fast and durable way to improve health. It’s the minimum that we should be able to do. And when you catch the bug of seeing that fast result, it’s almost like the Lazarus effect in the AIDS field, that got a lot of people hooked on treatment for good and ill.
The CCT “bug” sounds like the “high” of the RBF community. Will we look back in a decade and see RBF as an epic shift— from input-based financing to output— and outcome-based financing? Or will we think it was all just a collective hallucination?
I think it’s a big idea because it’s putting a lot of little ideas together. But I would distinguish the demand-side from the supply-side. The demand-side programs really were new. They were really different from what had happened before.
On the supply-side, people were already doing payment mechanisms that incentivized different things, but it is being packaged differently and brought to primary care in poor countries. In Latin America, we were using fee-for-service to increase productivity. The first problem to solve was production. Produce these things. Now it’s evolving to be: produce these things in this way. Adding that nuance actually creates a lot of incentives around information generation and tracking that is really positive for the field.
There is a lot of confusion surrounding the term Results-Based Financing (RBF). Philip Musgrove, the deputy editor for Health Affairs, has gone through the debris and set out some basic definitions. What does RBF mean to you?
I would distinguish very sharply between results-based aid, which is Cash on Delivery aid, which is closer to the GAVI model, which is the Global Fund model, and results-based payments within a health system. The other thing I would say is that I don’t think these things are incompatible.
There is a wealth of evidence on demand-side RBF in Latin America, but there are considerably fewer large-scale demand-side schemes in sub-Saharan Africa. Is that because they require strong health systems ex ante?
If you’re going to condition the use of certain services you want to be sure that you’re sending people to acquire something that’s actually going to be available. That’s why for example, in Nicaragua, where there was no supply in the areas the program was operating, we paid NGOs to provide services. I don’t think it’s insurmountable when those services aren’t adequate.
The other issue is that even if health services are terrible, the fact that you are transferring money to extremely poor families, along with some advice on how to use it, is extremely powerful. Because you’re not going to send your kids to school, you’re not going to take your kid out of the labor market if you don’t have enough money to feed your family. It makes sense that some minimum income level is required. And that level is so small in Africa—it’s a cheaper program for the donors.
So could a CCT program like we see in Mexico work in a country like Ghana?
I think so.
Why hasn’t it happened?
Because there are tradeoffs. But let’s take the idea of future oil revenues in Ghana. Those revenues could be used as a funding mechanism for a CCT program because you’re supposed to compensate the population for the natural resources loss anyway. And if you do it in a CCT mode, you’ll also be helping the next generation. I think it’s a really good and potentially financeable solution.
What makes a successful CCT program?
The first thing is a clear understanding of what you would like to accomplish with the transfer. So maybe it’s to provide that minimum income that you expect has an impact on consumption smoothing and allows for other kinds of investments. Other people have more restricted objectives. They want to do just vaccinations, or just births. I think the CCT is superior than trying to do these things piecemeal.
What about CCTs versus reproductive health voucher schemes like we see in Kenya and Uganda? What are the pros and cons of each approach?
A voucher is a way to put a fee waiver in the hand of a beneficiary. In general the voucher only covers the cost of care, but a lot of the barriers to seeking care have to do with other costs. Both are good, but I’m guessing that the other benefits of the CCTs, for nutritional status, for pregnant women and breastfeeding are going to be superior than the health gains that you’re going to obtain through just covering this one care episode.
You’ve just joined CGD as Director of Global Health Policy. What are your plans?
I’m going to focus on two areas and they’re related. One is demand-side financing in Africa and incentives for health. There is now enough evidence to say that this is a very powerful tool and we should start using it in other settings where health situations are worse.
The other area is on allocative efficiency. I’m interested in looking at how we can help developing countries have better institutions and processes for making evidence-based decisions about how to spend their budgets—the right mix of resources or the right mix of interventions given budget constraints.
Do we have enough evidence on what works to make decisions about the tradeoffs of various financing mechanisms and delivery platforms? The evidence base for CCTs in Latin America is fairly robust, but there are other settings and mechanisms for which we lack evidence.
The Disease Control Priorities Network has been focused on this issue, as are other universities. I think it’s possible. You’d have to use the impact assessments from totally different contexts to be able to ex ante model what would be the best mix, with lots of assumptions, but you could also use your own baseline data to put in the mix. I would bet that the CCT is more cost effective in Africa than it is in Latin America, because the situation is so much worse.
I used to work at CGD—it’s a unique place. How’s it going so far?
CGD as a platform is remarkable. Because it’s linked with other researchers in other sectors, and because it has such an effective communications platform, the likelihood that you can influence global health policy and practice is high.
How does it differ from your IDB days?
The IDB is not good at communicating what it does. And it’s not good at documenting what it does. But they have direct connections with developing country governments and that is really, really important. The risk of being a think tank is that you get a little divorced from reality, which is why CGD tries to find solutions that come to fruition in consultation with people from both developed and developing countries.
Have you ever wanted to do something totally different, career-wise? I always wanted to work on a vineyard.
Yeah…like park ranger. More of an outdoor life instead of sitting on the butt life.