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The moral and fiscal implications of antiretroviral therapies for HIV in Africa

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  • Paul Collier
  • Olivier Sterck

Abstract

Thanks to antiretroviral therapies (ART), people living with HIV (PLHIV) can now have a near-normal life at a cost of a few hundred dollars per year. We postulate that given this new low cost of maintaining lives, there is a moral duty to rescue those who are infected. This obligation creates a financial quasi-liability which for some African countries is comparable to their debt-to-GDP ratios. We construct a model to show that expenditure on prevention can pre-empt some of these liabilities. However, even with optimal prevention the quasi-liability is likely to remain too high to be affordable for a significant number of African countries. Extending the model to two players, we show that if the international community accepts part of the quasi-liability, as it does, it should finance a broadly equal share of prevention and treatment of future infections to mitigate moral hazard and avoid sub-optimal investment in prevention.

Suggested Citation

  • Paul Collier & Olivier Sterck, 2018. "The moral and fiscal implications of antiretroviral therapies for HIV in Africa," Oxford Economic Papers, Oxford University Press, vol. 70(2), pages 353-374.
    • Handle: RePEc:oup:oxecpp:v:70:y:2018:i:2:p:353-374.
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    1. Jeffrey W Eaton & Leigh F Johnson & Joshua A Salomon & Till Bärnighausen & Eran Bendavid & Anna Bershteyn & David E Bloom & Valentina Cambiano & Christophe Fraser & Jan A C Hontelez & Salal Humair & D, 2012. "HIV Treatment as Prevention: Systematic Comparison of Mathematical Models of the Potential Impact of Antiretroviral Therapy on HIV Incidence in South Africa," PLOS Medicine, Public Library of Science, vol. 9(7), pages 1-20, July.
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    Cited by:

    1. Gori, Luca & Manfredi, Piero & Sodini, Mauro, 2021. "A Parsimonious Model Of Longevity, Fertility, Hiv Transmission And Development," Macroeconomic Dynamics, Cambridge University Press, vol. 25(5), pages 1155-1174, July.
    2. Kabajulizi, Judith & Ncube, Mthuli, 2017. "Financing HIV/AIDS responses in Africa: Impact evidence from Uganda," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 843-860.
    3. Sterck, Olivier, 2016. "Natural resources and the spread of HIV/AIDS: Curse or blessing?," Social Science & Medicine, Elsevier, vol. 150(C), pages 271-278.
    4. Judith Kabajulizi & Judith Kabajulizi & Mthuli Ncube, 2015. "The economy wide impact of HIV/AIDS and the funding dilemma in Africa: Evidence from a dynamic life cycle horizon," EcoMod2015 8563, EcoMod.
    5. Hausken, Kjell & Ncube, Mthuli, 2015. "Policy-Makers, the International Community and People Living with HIV: The Need for New Commitment Mechanisms," UiS Working Papers in Economics and Finance 2015/6, University of Stavanger.
    6. Kjell Hausken & Mthuli Ncube, 2017. "Policy makers, the international community and the population in the prevention and treatment of diseases: case study on HIV/AIDS," Health Economics Review, Springer, vol. 7(1), pages 1-12, December.
    7. Remme, Michelle & Siapka, Mariana & Sterck, Olivier & Ncube, Mthuli & Watts, Charlotte & Vassall, Anna, 2016. "Financing the HIV response in sub-Saharan Africa from domestic sources: Moving beyond a normative approach," Social Science & Medicine, Elsevier, vol. 169(C), pages 66-76.
    8. Richard Manning & Olivier Sterck, 2018. "Rethinking international and domestic financing for HIV in low†and middle†income countries," Development Policy Review, Overseas Development Institute, vol. 36(4), pages 433-444, July.

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    More about this item

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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