Grant Performance and Health Financing: Analysis of 12 Years of Financing Decisions at the Global Fund to Fight AIDS, Tuberculosis and Malaria

Abstract

—The Global Fund to Fight AIDS, Tuberculosis and Malaria (“the Global Fund”) was established to attract, manage, and disburse additional financial resources toward Millennium Development Goal (MDG) 6. To increase the efficiency and impact of resources provided, performance-based financing (PBF) was included among the founding principles of the Global Fund. Since 2002, the Global Fund has disbursed over 28 billion USD to 145 countries or regional programs worldwide. This article investigates the degree to which PBF principles were followed in practice as well as the equity implications for the Global Fund's grant portfolio. We obtained performance and financial data on all disbursements (N = 6,064) and grant renewals (N = 892) between 2003 and 2014. Multivariate regression analysis was used to estimate the associations between performance ratings and financing amounts. The dependent variable was the fraction of original budgeted amount disbursed or renewed by the Global Fund. The main independent variable was the performance rating received by the grant. We also compared average funding shares by country income group before and after PBF adjustments. Our analysis found that lower performance ratings were associated with a smaller amount of the next period's budget disbursed; in addition, lower ratings were associated with a higher probability of the grant not being renewed after two years of implementation and a smaller proportion of recommitted funds. Low and lower-middle income countries obtained marginally lower grant performance ratings but still received 90% of the total grant renewal amounts from the Global Fund. These results suggest that the Global Fund has succeeded in implementing PBF principles over the past 12 years without shifting resources away from lower-income countries. Larger impact may be possible in the long run if health outcomes rather than only outputs or coverage indicators are also incentivized in PBF contracts between countries and the Global Fund.