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Sally Murray

Is it good to campaign for increased government aid to cost-effective interventions? Part 2

, I explained that if most government health aid is highly cost-effective, lobbying for governments to spend more on any specific cost-effective health aid project may be a bad investment. This, roughly, is because such lobbying would merely move aid from one highly cost-effective intervention to another- doing no overall good.

In this post, I will explain why we do indeed have some reason to believe that most government health aid is highly cost-effective, and so, advocacy of the kind described above may be a bad investment for an effective altruist.

As the world's biggest national donor to health aid, and the target of much advocacy, we began by investigating the cost-effectiveness of the US’s overseas development assistance (ODA) for health. (We later roughly check our results against other countries).

We attempted to estimate the cost-effectiveness of US health ODA by reading descriptions of its projects, and estimating their cost-effectiveness using secondary literature, mainly the DCP2. The individual projects that comprise the US's health aid are listed in the OECD's online QWIDS database, which provides a brief description of each aid project, as well as the amount of aid committed and distributed to it. There are thousands of projects in the database for each year, so for efficiency we took a randomised sub-sample of about 200 projects for the year 2010 (with greater representation of projects according to the amount of funds they received). Because this sample was relatively small, we later conducted an informal eye-scan of a far larger number of projects (~1000) to check if the results we'd obtained seemed representative- it seemed that they were.

Using the project descriptions, we matched each US health ODA project in our sample with its closest equivalent project in the DCP2- one of the most respected documents offering cost-effectiveness estimates for a wide range of public health interventions. In rare cases where we had better data regarding an intervention's cost-effectiveness, from, e.g. GiveWell or WHO-CHOICE, we used this improved estimate.

By thus matching project descriptions with cost-effectiveness estimates for most-similar programmes, we obtained a ball-park estimate of the cost-effectiveness of each intervention-type in our sample of US health aid. We then used this data to explore means, medians, spread, and so on.

So what did this process uncover? The basic story seemed to be that most US health aid is allocated to highly cost-effective final interventions: neonatal and early childhood care, polio eradication through vaccinations, HIV prevention (e.g. family planning, education campaigns), water hygiene and sanitation (WASH), and so on. The estimated mean cost-effectiveness of our sample was 34 DALYs averted per $1000- around three times as cost-effective as the highly cost-effective interventions that we have found charities lobbying for (mass drug administration (MDA) for neglected tropical diseases (NTDs), or the distribution of insecticide-treated bednets (ITNs) for malaria- which we tend to model as averting around 10 DALYs per $1000). This high cost-effectiveness was not due to a few very highly cost-effective interventions skewing our mean upwards: most of the projects (i.e. the sorts of projects listed above) came out as cost-effective at more than 10 DALYs averted per $1000 (i.e., better than deworming etc).

It is important to note that USAID's health programmes almost certainly do not have a mean cost-effective of 34 DALYs averted per $1000. Almost certainly, US health ODA is considerably less cost-effective than this (for reasons outlined in the footnotes). But importantly, many of the reasons (2-4 in the footnote) to downgrade this estimate could well constitute reasons to also downgrade expectations of the cost-effectiveness of mass drug administration for NTDs, the distribution of ITNs and so on, at least when these are delivered by a government aid agency. If both are less cost-effective, then again, moving money from an average health aid project to ITN distribution (etc) could still do no good.

We should also note, however, that an estimate that US health ODA is on average of similar cost-effectiveness to deworming is less bizarre than you might think. Giving What We Can recommends donating to deworming and ITN charities because of their high marginal cost-effectiveness: given the existing health programmes that are already being carried out, these are the remaining, underfunded, programmes with the greatest expected positive impact per dollar. It is quite possible that before GWWC came along, the 'lowest hanging fruit'- the most cost-effective interventions- were already being swept up and funded fairly well, and that funding these programmes continues to take up most of countries’ health aid budgets. The average cost-effectiveness of any organisations that plucked these low-hanging fruit should be better than their marginal cost-effectiveness, and could well be better than the cost-effectiveness of the interventions GWWC have identified as still underfunded (especially because GWWC focuses only on interventions that private donors can support).

We have also not checked how far our results for USAID generalise to other aid agencies with great thoroughness. Very briefly, we can say that the UK's Department for International Development has a very good reputation (generally better than USAID's), and within health also seems to focus on highly cost-effective interventions (evidenced by its annual reports, and QWIDS). A brief scan of other major aid donors’ health aid portfolios (Germany, Sweden and The Netherlands) using QWIDS suggests a similar composition to that of the US, except with considerably larger proportions spent on "health sector development"; we struggle to assess the cost-effectiveness of ‘health sector development’, or even to gleam exactly what it involves, so remain unsure as to how this should affect our cost-effectiveness estimate (Can you help?).

In summary, we don't have enough evidence to conclude that US health aid- or health aid in general- has a mean cost-effectiveness similar to that of highly cost-effective interventions like mass drug administration for NTDs or free ITN distribution. However, we have enough evidence to suggest this may well be the case.

And if this is the case, and if (discussed in my previous blog), successful advocacy for any particular cost-effective health aid intervention tends to move money away from a competing project of mean cost-effectiveness, this form of advocacy would do little good; it would certainly be a bad investment for an effective altruist. Due to these doubts and uncertainties, we cannot yet recommend donations to organisations whose main claim to impact is through the performance of advocacy that encourages governments to increase their spending on particular cost-effective aid interventions. If we are to recommend such organisations in future, we will need to receive much stronger evidence that they generate large, positive improvements in the overall cost-effectiveness of government aid.

*Reasons to think USAID’s health aid is not cost-effective at 34 DALYs per $1000.

1. Some of the funding for each project is spent on the administration and bureaucracy that support it. We expect that if it accounts for admin costs at all, the DCP2 treats admin costs as much lower than those actually borne by USAID, which has many levels of disbursement, hires expensive consultants, and so on.

2. Aid projects are not described to a good level of detail in the QWIDS database. This made it hard to identify the DCP2 interventions with which each project best corresponded, and thus to attach the 'correct' DCP2 cost-effectiveness estimate to it.

3. The cost-effectiveness estimates in the DCP2 are themselves tentative and sometimes inaccurate to an important degree (see, e.g. 

http://blog.givewell.org/2011/09/29/errors-in-dcp2-cost-effectiveness-estimate-for-deworming/

). We do not have good evidence to inform how we should adjust each estimate to take account of, for example, regression to the mean.

4. Our model assumes that if USAID stopped funding a health project, this project would stop completely. This is probably not true in many cases. It's likely that without USAID's help, developing country governments would fund and manage at least some of the programmes currently funded by USAID.

5. USAID’s health aid is $8 billion per annum. If each $1000 of this really were averting 34 DALYs, USAID’s health aid would be averting 264 million DALYs per year. If they were managing ‘just’ 10 DALYs per $1000 - a plausible, though very uncertain, estimate for the good done by deworming treatments - they would be averting 80 million DALYs a year. How plausible are those figures? To us, they both sound like a lot. The number of child deaths per year reduced by 5 million between 1990 and 2011, which suggests around 250 million more DALYs averted per year due to all reductions in child mortality over the past two decades. Could US health ODA be responsible for the equivalent of all of this gain (at 34 DALYs per $1000) or a third of it (at 10 DALYs per $1000)? Or consider that the burden of disease in Africa is 375 million DALYs (SOURCE: p. 60 of 

). Could the US be averting the equivalent of 70% of this burden (34 DALYs per $1000) or even 20-25% (10 DALYs per $1000)? To put the plausibility of such achievements into context, US health ODA is roughly 10% of total health spending in low and low to middle income countries. Furthermore, some improvements in health probably come from improvements in incomes, agriculture, urban planning, education and so on, rather than health spending directly. US health ODA could have a disproportionately great impact by being better-targeted (as evidenced by the QWIDS database research cited in this article), and less likely to be lost through corruption, than other sorts of health financing. It it also possible that US health aid would achieve less than average due to expensive layers of bureaucracy and salary payments, political priorities, and a lack of democratic accountability to recipients. Overall we judge it unlikely that US health ODA is achieving as much for global health as is implied by a cost-effectiveness of 34 DALYs per $1000, but are less sure of the plausibility of 10 DALYs per $1000. (What do you think?)

Krisztina Csortea

Peter Singer: The why and how of effective altruism

 is now available on TED.com! Please share, watch along with us and tell us what you think! You can find a written version of the talk 

If you've been inspired by Peter Singer's TED talk, you might want to read more about cost effective charities recommended by Giving What We Can 

Watch this space for posts on effective altruism and for responses to Professor Singer's talk in the next few days!

William MacAskill

Living on $1.25 a day - what does that mean? 

1.4 billion people live on less than $1.25 per day. What does that mean?

What it doesn't mean is that these people are living on what $1.25 could buy in, say, Kenya. If you thought that, then you might think that $1.25 isn't so bad, because money goes much further in developing countries.

Unfortunately, the fact that the money goes further in such countries has already been taken into account. What "$1.25 per day" means is: people living on this amount consume the goods equivalent of what $1.25 could buy in the US in 2005. That is to say, the figure is purchasing power parity (PPP) adjusted. That means we can work out how much, in actual money, people in Kenya live on below this line. In 2005, the purchasing power parity conversion factor was US$1 to 29.5 Kenyan Shillings. So $1.25 is about 37 Kenyan Shillings. At market exchange rate (today's rate, so again this is only a rough estimate), that's 44¢.

Because that's still talking about 2005 money, we want to adjust for inflation, so, assuming 3% inflation per year (again, keeping it rough), that's 56¢. So, in my view more accurately, we should say that the global poor, in Kenya at least - though other countries at an equivalent level of economic development have similar PPP conversion factors - live on 56¢ per day. Jeez.

However, the story doesn't end there, because "$1.25/day" doesn't refer to income. It is based on measurements of consumption. So when a person gather sticks from the forest for their own use - that counts as 'consumption'. Similarly, as far as I understand it, any free services provided by the government count in this as well.

So I think a more intuitive way to think about extreme poverty is: if you gave a Kenyan living below that poverty line 56¢, you'd have doubled what they can consume in a day.

A lot of people who know this about the $1.25 a day line subsequently refuse to believe it. I really struggle to believe it. Surely, if someone lived in the US on $1.25 a day, they would die! (I heard this argued in a conference on poverty by an academic who'd written several articles on poverty.)

If we're referring to income, I think that's simply not true. With an income of $1.25 a day you could have a much better quality of life than the extremely poor. You can dumpster dive and live off the excess of the affluent country; they have free access to roads and lighting, a good legal system and police protection, and medical assistance if they get sick. I know someone who lived on $1000 per year for a couple of years - several times more than the extreme poor, but he had a really pretty reasonable quality of life.

However, if you're thinking about consumption rather than income (as you should), there is a difference which does make the comparison to "$1.25 living in the US" misleading: in the US you just can't buy the sort of low-quality goods that you can in developing countries. Markets just don't exist for those goods. Even the most basic lentils and rice sold at Walmart in the US would be regarded as a luxury item for people living on $1.25 a day.

Eliz Kilich

Hilleman Laboratories: A potential answer to the inequity in vaccine need and vaccine supply?

Vaccines have delivered enormous health gains by eradicating some of the worst diseases confronted by humanity. As a result Giving What We Can has been looking into biomedical research projects as potentially high-leverage opportunities for donors. As part of our investigation we spoke with Hilleman Laboratories, a research group operating in new Delhi, India that tries to adapt vaccines to make them suitable for widespread use in the developing world. We concluded that thanks to seed capital from some large pharmaceutical companies they did not have any need for additional funding from our members. However, Dr Davinder Gill, Hilleman Laboratory's Chief Executive Officer kindly made time to talk to Eliz Kilich of Giving What We Can about their research and what 'funding gaps' remain in vaccine research.

What is necessary for a biomedical project to be worthwhile?

I think there are three essential components to a project being worthwhile. Firstly, there must be a public health need. Secondly, it is essential that the appropriate resources and networks are available and can be utilised effectively. The project needs to be financially viable. The third component to a successful project is organisation. The skills, competency, experience and potential outreach of the organisation are critical. There must be a clear goal – a point of completion.

Why have we struggled to produce some vaccines in the past despite substantial investment?

Investment has mostly taken place in the developed world. This does not reflect the areas where the burden of diseases such as TB, malaria and HIV are highest. Therefore vaccines have been developed largely for the needs of the developed world. The issues of access and affordability have not been addressed. There is a clear difference in equity in the developed world and developing world.

In terms of why investment has not directly yielded results is largely because the research is inherently “risky.” There is no real guarantee of success. HIV, malaria, TB are extremely complex diseases meaning we are still unsure which strategy to use when developing vaccines.

Which diseases or approaches are currently neglected?

This includes some of the world’s tropical diseases such as Dengue, Chagas Disease and Leishmaniasis. Respiratory and diarrhoeal diseases are also a major health burden in the developing world with few affordable vaccines available. This will include pneumococci, rotavirus and other gastroenteritis-causing organisms.

In terms of approaches that are neglected, I would say the technical aspects, such as altering the formulation, packaging and delivery method, have been overlooked in the past. The current methods are not optimized for the developing world. For instance, Rotavirus Vaccine licenced in 2006 is in liquid form and needs to be refrigerated in order to thermostabilise the vaccine. If delivery methods can be improved the costs could be kept very low.

What are the main goals of Hilleman Laboratories and what makes it such a good project?

Our goal is to bridge the translational gap between research and development of vaccines to suit the needs of the developing world. We have a unique and strong 50:50 partnership between the Welcome Trust and Merck. Also, by being based in India we have a strong infrastructure to leverage, because the country has a long tradition of actually making vaccines. At the moment we are still in preclinical research but aim to test our products in clinical trials by next year.

What benefit would the vaccines you plan to develop offer?

The main obstacle to the access of vaccines in the developing world is pricing. The vaccines for such diseases (as mentioned above) cannot be afforded by the developing world. Despite organisations such as GAVI subsidising the prices from $50 to about $5 a dose, this is still unaffordable for the broader needs of the developing world. Hopefully, the optimised vaccine will reduce the cost to $1 a dose or less. This saved procurement cost would be added to the saved distribution cost of vaccines by reducing wastage.

Vaccines need to be kept cold otherwise their effectiveness can be reduced a lot and their shelf life is shortened. Vaccines cannot be adequately stored in the cold in tropical climates where transport is difficult. Therefore a thermostable vaccine would impact to reduce the cost dramatically. These reduced expenses for delivery and disposal would reflect in the price of the vaccine. By being manufactured in the developing world the operational cost would also be kept low, allowing the price of the vaccine to be affordable.

What are the pitfalls such research can fall into?

The obstacles include timing. It is important that stakeholders, that will be crucial in the implementation of the vaccine, are brought into the development and conversations early on. Not being fast enough to deal with local agencies, government and distribution could hinder progress. This is because we would be in a situation where technically the problem of vaccine design is solved but we would have no one to take on the vaccine to adapt and implement it.

What is the future for Hilleman Laboratories?

Hilleman Laboratories has a strong and committed mission to address the major needs in global health. As a strong partnership and as a global company we are well-connected to global health policy makers and agencies. Our collaborative model, network and technical innovation provides us with the resources to make our long term goals successful.

Rob Wiblin

Project Healthy Children: a promising opportunity for leverage

We are excited to announce that for the first time in a while, Giving What We Can is changing its recommendations! Below we describe what is happening and answer some natural questions that flow from that.

What is happening with our recommendations?

We are splitting our recommendations into two different categories, and adding a new one to the list - 

AMF and SCI will become our ‘High-confidence recommendations’. They have been vetted extensively by GiveWell, and have a high probability of achieving a lot of good with your money.

Project Healthy Children and Deworm the World will be classified as ‘Opportunities for leverage’. There are two reasons to separate them in this way: their projects have not been scrutinised in the same level of detail as AMF and SCI, and by its nature their approach - influencing health policies in developing countries - is harder to concretely evaluate. If successful, both might achieve more good per dollar than AMF and SCI. However, it is hard to know how likely they are to do so.

We are also going to list other organisations such as

We regard this as a very promising opportunity and more information will be forthcoming in the near future.

We are writing a short report on AidGrade, and will likely have more to say about them in future as their project matures.

We are at an early stage, collecting information on the fundamental cost effectiveness of their work.

Those we have looked at in the past, and a brief assessment of where we stopped 

Global Network for Neglected Tropical Diseases

Project Healthy Children sends experts to low-income countries, now exclusively in sub-Saharan Africa, to hasten and increase the quality of mandatory micronutrient fortification of staple foods such as wheat and maize flour, sugar and oil. They place advisors within recipient governments to offer encouragement, coordination across agencies and technical assistance, depending on what is required to push fortification standards forwards.

A significant fraction of people in recipient countries experience worse health due to insufficient intake of iron, vitamin A, iodine, zinc and folic acid. These deficiencies cause the greatest harm in children and pregnant mothers. Ensuring that commonly-consumed foods contain these nutrients should improve population health.

What are some promising things about Project Healthy Children?

They are promoting an approach - micronutrient fortification of staple foods - that costs very little per person reached, typically under $0.30 per year for ongoing fortification with the most important nutrients. Micronutrient intake is regarded as a top priority health issue for the developing world by the 

Increased micronutrient consumption is highly likely to reduce the severity of deficiency.

They have operated, and probably will continue to operate, in countries with high levels of micronutrient deficiency.

They operate on a tight budget. A single member of staff lives in each country for 3-6 years and is paid a modest income. This individual, with support from two central staff members in the US, can run a full country program to completion for only a few hundred thousand US dollars.

If they achieved a comprehensive national mandatory fortification scheme in any given country, this would affect millions of people. The cost to PHC per person reached with fortified foods per year would be in the order of 1 cent.

We have spoken with four contacts in affected countries who have had dealings with PHC. Their names were provided by a technical fortification expert recommended by PHC. All had a positive view of the competence of PHC staff, felt they were filling a useful gap not filled by other organisations, and were respected and appreciated by recipient governments.

We have heard that some of the countries PHC has operated in, or are considering opening new offices is, are not yet making progress on food fortification.

Our qualitative impression from dealing with them is one of overall competence.

They have described learning from mistakes made in Honduras in the early days of the organisation, and have dramatically shifted approach in response.

They claim to put a lot of research into deciding in which countries to open offices, weighing up the chances of success and the number of people assisted, among other characteristics. Documents they have sent us appear to back this up.

As a result of all of the above, their approach could generate big health gains for each dollar they spend. A ‘naive’ cost effectiveness calculation might be as follow:   

The country has a population of 10 million

They have a one in three probability of the program successfully leading to comprehensive iron fortification to combat anemia

If they succeed, they will bring forward the initiation of fortification by six years

Iron fortification would on average improve health by 0.3% for each person in the country (

), considering both the level of harm caused by anaemia and its prevalence.

This leads to an estimated ~$7 per DALY averted, or ~140 DALYs for each $1000. If this were correct, it would be a higher expected impact than AMF or SCI, and obviously be extremely exciting.

While this is a plausible calculation, I expect that it will turn out to be over-optimistic. Experience shows that the more you learn about an intervention the more likely it is to 

, and be less impressive than you initially thought. The question is how much we should adjust back estimates such as this to account for our remaining uncertainty. This is in large part a judgement call, which is why we are putting forward this information so that donors can make their own judgement.

What are your most significant remaining questions about PHC?

We have not yet scrutinised the literature on how much ill-health is caused by anaemia. GiveWell have suggested that the evidence on this used by the WHO and other groups may not be comprehensive or reliable.

There are conflicting reports regarding the impact of vitamin A and zinc deficiencies on child health. These may be subject to the ‘decline effect’ where high initial estimates are not replicated in future research. For instance, 

. Furthermore, progress has been made on vitamin A supplementation and salt iodisation in recent years, so rates of deficiencies may not be as high today as in the past.

We do not have a clear record of their apparent impact across all of the countries in which they have operated. As such, the positive stories we have heard in Rwanda and Malawi may not be representative. We expect to receive further information about this issue in the near future.

Larger organisations such as UNICEF, USAID, Hellen Keller and GAIN also work on micronutrient nutrition. Previous successes that appear to be caused by PHC may be in part due to the work of other organisations. However, I would note that PHC has given compelling responses to questions about their overlap with other groups.  

They claim that UNICEF does not do their style of fortification policy work.

USAID provides funding for programs, but also does not do work on fortification policy with governments.

GAIN and Helen Keller run more similar projects, but PHC is careful not to open offices where they already have matters covered. GAIN usually focusses on the largest countries, which creates a niche for PHC in providing experts for small, challenging or otherwise neglected countries in need of fortification.

Note that even where a country would otherwise achieve fortification, PHC can still have impact by increasing the number of nutrients used, the share of the population covered, and the enforcement of the policy.

We hope to speak with representatives from these organisations in the near future to confirm all of these claims.

Would you personally give to Project Healthy Children on the information we have?

I will be making a donation to PHC for two reasons. One is that I am optimistic they are having a large impact on people’s health. The second is that I hope it will encourage their further involvement with our research. The value of the information we hope to get from them is significant. If they pass further scrutiny they could be a target for large donations from both us and other effectiveness-focussed donors, which would allow them to operate in many more countries which would benefit from fortification.

What should influence my decision about whether to give to a low or moderate risk recommendation?

If you prefer a high probability of some impact, or are naturally skeptical about organisations claiming to have a large impact by influencing government policy, then our ‘low-risk recommendations’ will be more appealing to you. If you are particularly persuaded by the material available about PHC and DtW, inclined to give them the benefit of the doubt, and comfortable with variable results, then you will be more inclined to give to those groups.

As described above we are collecting information which will give us a more comprehensive view of PHC’s record of success, will aim to speak with other organisations working on micronutrients, and will scrutinise the evidence used to support high benefit to cost ratios of fortification. Further research could both lead us to endorse PHC with greater confidence, or drop it from our list. Those who would like to know more, or offer relevant information, can reach us at research [at] givingwhatwecan [dot] org.

What is GiveWell’s attitude to Project Healthy Children and Deworm the World?

We asked GiveWell about its views on these organizations. GiveWell responded as follows:

"Both Deworm the World and Project Healthy Children are near the top of the list of organizations we would be interested in considering were they interested in working with us. In both cases, we think there are significant unanswered questions about the organizations' track records that lead us to expect higher impact per dollar from our 

 (AMF, GiveDirectly and SCI) relative to these 2.

We would be interested in evaluating both PHC and DTW if they were ready to go through our 

. (In fact, we reached out to both organizations earlier this year suggesting that they engage with us.) In addition, in the case of DTW, we've done considerable work on the 

 and feel comfortable in our assessment of the evidence. We have only done minimal work on the evidence for the types of nutrition programs that PHC implements and, based on our past experience, we feel that this in-depth assessment of the independent evidence for program effectiveness would also be an important step in any assessment we would make.

We agree that both organizations have the potential for leveraged impact, but we think it's worth noting that there are many other organizations in many different categories about which the same could be said. Within developing-world health, there are many other organizations that seek to leverage government resources (examples include 

, and many more) and there are also many organizations that seek to pioneer fundamentally new approaches to old problems, which if adopted widely could have extremely magnified effects (some examples can be found on the 

 website). We also believe that our top charities have their own opportunities for magnified/leveraged impact (see the section just below the "strengths/weaknesses table" of our 

). More broadly, there are many organizations in many causes that work on policy advocacy, scientific research aimed at technological breakthroughs, field research aimed at better informing aid, systems change, culture change, and other interventions that could have enormous effects from a cost-per-DALY perspective. Donors seeking higher-risk, higher-reward charities have many options."

Preferring more strictly vetted charities is a defensible position. Whether you think DtW or PHC can outperform other organisations will be affected by how strongly you assume a charity of this kind doesn’t work until comprehensively proven otherwise. However, given the potential to increase our impact several-fold relative to AMF, I think we should take their approach very seriously both in our further research, and when considering where to give. The risk that PHC turns out to be worse than the alternative has to be balanced against the fact that it could be much better.

While I agree with GiveWell that it is possible that the other organisations listed offer even larger leverage, the research we have done gives us greater confidence in PHC at this point than any of the others listed. The probable existence of other, better, as-yet-unidentified options isn’t relevant for someone deciding between AMF or PHC today.

Blog

Is it good to campaign for increased government aid to cost-effective interventions? Part 2

Peter Singer: The why and how of effective altruism

Living on $1.25 a day - what does that mean?

Hilleman Laboratories: A potential answer to the inequity in vaccine need and vaccine supply?

Project Healthy Children: a promising opportunity for leverage

Moving people rather than money

What a £5 coffee break taught me about living below the line

Halfway through Living Below the Line

Opportunity to intern with Giving What We Can

Dan Pallotta: the Way We Think About Charity is Dead Wrong