As economies have grown in many low-income countries, governments increasingly face “transition”–the reduction of external financing typically over a period of two to five years, on the assumption that the government will then fully self-finance the health programs that had been supported by donor funds. This trend takes place within a context of greater competition for aid dollars, and declining interest by some countries in foreign assistance. Country-led, responsible transition can help to maximize health progress and sustainability, and allow scarce external resources to be targeted for greatest efficiency and impact. But transition can also pose serious risks to national budgets, health systems, and ultimately health outcomes. This paper examines risks, in particular, the widely overlooked risk of simultaneous transition, or multiple funders withdrawing from the same country over the same time period. The landscape of development finance is changing, and multilateral institutions and bilateral agencies must adapt.
Note: Since the release of the report on September 19th, the table on page 24 of the full report (below) has been updated for improved clarity of data presentation. However, the analysis remains the same.