Reallocation of Foreign Aid Flows to Improve HIV Sentinel Surveillance in Latin America and The Caribbean

This paper estimates the effects of foreign aid on health status in selected Latin American and Caribbean (LAC) countries (n= 27 countries) between 1990 and 2013, using HIV as a main indicator and controlling for social-structural variables. Increases in foreign aid for HIV along with relatively lower price of antiretroviral therapy (ART) have improved access to medical care in low- and middle-income countries. However, HIV/AIDS still remains as one of the leading causes of death and disability in resource-poor settings. Developing and emerging economies have experienced the negative effects of the HIV epidemic, with prevalence relatively low in Latin America, but high in the Caribbean, where it is comparable to countries in Sub-Saharan Africa. Our econometric approach used a random effects panel data analysis with robust standard errors to account for heteroskedasticity. Differences of the aggregate regional data have some influence on life expectancy or the nature of HIV prevalence over time. Changes in measures of sickness and wellbeing (HIV prevalence and life expectancy) are associated with variations in foreign aid flows, controlling for a set of social-structural variables. Our study shows that a 1% increase in foreign aid is associated with a 5% reduction in HIV but, due to the uncertainty of the epidemic, the net impact is unknown. This study suggests that the global funding for HIV treatment has improved health status in this region and sustains that well targeted increases in foreign aid for HIV help alleviate the burden of disease and improve health capital in the region. This paper shows that HIV prevalence declines with increased flows of foreign aid, however this optimistic result should be carefully considered because of the uncertainty around the lack of consistency in sentinel surveillance. Developing countries with HIV infections on the rise will require financial, public health and logistic resources to implement successful interventions, which are characteristics of industrial economies; therefore, better measurements are needed to adjust the degree of response.

Key Words: HIV; Foreign Aid; Latin America; Caribbean; Sentinel Surveillance