Social Science & Medicine 50 (2000) 169±176

www.elsevier.com/locate/socscimed

The role of the World Bank in international health:

renewed commitment and partnership
Joy A. de Beyer a, Alexander S. Preker a,*, Richard G.A. Feachem b
a
World Bank, 1818 H. Street, N.W., Washington DC, 20433, USA
b
Institute for Global Health, University of California, 74 New Montgomery Street, San Francisco, CA 94105, USA

Abstract

During the course of the past ten years, the World Bank has become the single largest external ®nancier of health
activities in low and middle income countries and an important voice in national and international debates on
health policy. This article highlights the Bank's new strategic direction in the health sector aimed at: improving
health, nutrition, and population outcomes of the poor; enhancing the performance of health care systems; and
securing sustainable health care ®nancing.
Millions of preventable deaths and treatable illnesses, together with health systems that are inecient, inequitable
and ine€ective, have motivated expanded Bank support for the health sector in many of its client countries. The
new policy directions and system-wide reforms observed in these countries are the result of both demand and supply
factors. It is part of a general shift in the Bank's approach to development assistance, which sees systemic reform as
a way to improve the impact and sustainability of investments in health. On the demand side, the Bank is trying to
adapt to ongoing political, technological, economic, demographic, epidemiological and social pressures. On the
supply side, the Bank's growing international experience and substantial ®nancial resources are used to complement
the development assistance provided by other organizations and the global e€ort to improve health and health
systems in low and middle income countries. # 1999 Elsevier Science Ltd. All rights reserved.

Keywords: World Bank; Health policy; Health system reform; International health; Human development

During the past ten years, the World Bank has
become the single largest external ®nancier of health
activities in low-to middle-income countries and an im-
portant voice in national and international debates on
health policy (Note 1). The Bank's major health sector
report Ð ``World Development Report 1993: Investing
in Health'' Ð was based on extensive analysis and
* Corresponding author Tel.: +1-202-473-3665; Fax: +1-
202-522-3234.
E-mail addresses: jdebeyer@worldbank.org (J.A. de
Beyer), apreker@worldbank.org (A.S. Preker), rfeachem@-
psg.ucsf.edu (R.G.A. Feachem)
world-wide consultation. The 1997 ``Health, Nutrition,
and Population (HNP) Sector Strategy'' de®nes the
Bank's enhanced commitment and policies in the
health sector during the period leading into the 21st
Century. As described in this document, the objectives
of the Bank's involvement in the HNP sector are to
assist client countries to:
. improve the health, nutrition, and population outcomes
of the poor, and to protect the population from the
impoverishing e€ects of illness, malnutrition, and
high fertility;
. enhance the performance of health care systems by
promoting equitable access to preventive and cura-

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170 J.A. de Beyer et al. / Social Science & Medicine 50 (2000) 169±176
tive health, nutrition, and population services that
are a€ordable, e€ective, well managed, of good
quality, and responsive to client needs; and
. secure sustainable health care ®nancing by mobilizing
adequate levels of resources, establishing broad-
based risk pooling mechanisms, and maintaining
e€ective control over public and private expenditure.
These new policy directions will be described in greater
detail in this article.
Rationale for Bank involvement in international health
Investing in people is at the center of the Bank's
development strategy for the 1990s, re¯ecting the fact
that no country can achieve sustainable economic
growth and poverty reduction without a healthy and
educated population. E€ective programs for infectious
disease control, nutrition and reproductive health can
enhance workforce productivity, reduce disease-related
poverty and improve children's learning in school.
Good health and reproductive choice have a strong
impact on individual welfare and a nation's socio-econ-
omic development (Note 2). Despite clear gains in
health for developing nations during the past 30 years,
there are still millions of deaths and illnesses that
could be prevented or treated easily and inexpensively.
In some countries, per capita spending on health is so
low that it does not provide sucient resources for
even basic health care for the population. In other
countries, a more tractable and pervasive problem is
poor allocation that squanders scarce resources on
interventions that give only meager health improve-
ments.
In addition to the links among health outcomes,
economic growth and poverty alleviation, the economic
and ®scal importance of the health sector is another
compelling reason for World Bank involvement. In
many countries, a very large share of national product
and public resources is spent on health care, and
should be well spent. If health expenditures grow too
rapidly relative to the rest of the economy, the negative
®scal consequences can hurt economic growth and
crowd out other social expenditure (such as education
and social protection) which have a signi®cant impact
on poverty reduction and health.
Unique features of the social sectors
The Bank is continually making internal changes to
develop the skills and procedures needed to respond
appropriately and in a ¯exible way to some of the
special characteristics that make international health a
dicult area in which to work e€ectively:
. the health sector serves people throughout their life-
cycle;
. most interventions require behavioral changes and
time;
. implementation arrangements are often di€use;
. reforms are often intensely political;
. frequently there is institutional resistance to change;
. uncertainty and the high cost of illness require risk
pooling;
. the private sector is prominent but market failure is
signi®cant;
. governments have an important role but have weak
institutional capacity; and
. monitoring and evaluating performance is dicult.
An available supply of contraceptives, vaccines, or
micro-nutrient supplements does not automatically eli-
cit people's demand for them. Many health interven-
tions require behavioral changes, time and complex
partnerships between the public and private sector to
work. The social choices that societies face in allocat-
ing resources eciently and e€ectively across the life-
cycle and encouraging individuals or population
groups to change their behavior, make HNP sector
reforms intensely political and can generate strong re-
sistance from vested stakeholders whose interests are
threatened by proposed changes. The diculty of
reaching consensus is more general; the complexity of
the issues gives rise to debate among professionals in
the Bank and other international organizations, for
example: about the most appropriate balance and roles
of the public and private sectors, the cost-e€ectiveness
of di€erent types of interventions and the extent to
which these calculations should guide resource and
program decisions, the rationale and realities of fees
for health care and the trade-o€s between some growth
promoting policies and poverty alleviation objectives.
Need for international collaboration and partnerships
To change the deeply ingrained systemic problems in
the health sector, most countries say they need: (a)
®nancial resources that outstrip their local capacity;
(b) a broad global perspective and intersectoral exper-
tise; (c) long-term commitment since even small
changes in outcome may take as long as 10 to 15 years
to realize, extending well beyond the average length of
a Minister's term in oce; and (d) an understanding of
local circumstances (economic, political, social and in-
stitutional).
WHO, UNICEF, the Bank and other international
organizations have each contributed in their own mod-
est way to improving health across the world during
the past few decades. Yet the 21st Century harbors
many new challenges. Demographic shifts with contin-
 J.A. de Beyer et al. / Social Science & Medicine 50 (2000) 169±176 171

ued population growth, aging populations, urbaniz-
ation, economic disparity and a growing number of
poor will put new demands on health care systems.
Looming behind these predictable trends are a number
of unknown threats such as new diseases and epi-
demics, and political turmoil.
Some countries will become better o€, no longer
needing the intensive assistance they previously
received from the international donor community.
Others will slip back and require more attention.
Finding the right balance in the mix of inputs among
basic, post basic and systemic interventions in this

Fig. 1. Cumulative growth in HNP lending and projects (1996 prices).

172 J.A. de Beyer et al. / Social Science & Medicine 50 (2000) 169±176
dynamic context will be one of the great challenges for
the next decade.
Fortunately, recent progress in the natural and
social sciences holds the hope that some of these po-
tentially negative trends may be o€set by new and
more e€ective approaches to health care, an enhanced
partnership between the public and private sectors in
providing health services, and a worldwide spread of
new information and technology which should even-
tually bene®t the poor.
The Bank's comparative advantage is its ability to
mobilize large ®nancial resources, work across many
sectors, and provide a macro-level country focus. Yet
none of the international organizations can address the
complex health, nutrition, and reproductive challenges
which face the world during the 21st Century alone.
The Bank is, therefore, seeking to strengthen its collab-
oration and partnerships with many other agencies,
including NGOs, and the private sector. Within the
Bank, the aim is continual strengthening of technical
expertise and signi®cant re-tooling of both skill-mix
and working culture. Greater selectivity and comple-
mentarity is also required so that scarce technical and
®nancial resources reach those who need them the
most.
Current track record of the Bank in international health
The Bank is currently involved in international
health in four di€erent areas:
. Lending and credits
. Development grants
. Policy advice
. Research
Fig. 2. Scope of intervention.
From a modest start 30 years ago, the Bank's role in
international health has expanded rapidly. At the end
of FY99 there were 199 active Bank supported HNP
projects in 84 countries with total commitments of
US$9.5 billion (1996 prices), and 130 completed pro-
jects (see Fig. 1 and Note 3). By comparison, total
overseas development assistance to the HNP sector for
the period from 1985 through 1993 was about US$2
billion annually in 1996 prices (excluding Bank loans
which averaged US$0.75 billion per year in 1996 prices
over this period).
Typically, well over half of Bank health funding is
``soft'' money with an e€ective grant component of
80%. All projects include substantial funds from the
borrowing government, and many also include funds
from other multilateral and bilateral donors who ``buy
into'' projects and often team up with Bank sta€ to
work with client governments to de®ne and develop
project activities and ®nancing needs.
Recent directions in lending and credits
The content and focus of health loans has changed
signi®cantly in recent years and continues to change.
Earlier projects typically expanded and upgraded state
health services, and Bank funds were spent on govern-
ment rural health centers and hospitals, medical equip-
ment and supplies including contraceptives and
pharmaceuticals, training (and sometimes salaries) for
sta€, and ambulances and other vehicles (inter alia).
Some project funds still go to such things because
expansion and strengthening of the government health
system is still a priority in much of Africa and Asia. In
addition, three other important needs are also being
addressed worldwide (see Fig. 2).
 J.A. de Beyer et al. / Social Science & Medicine 50 (2000) 169±176
In many middle-income countries, where basic ser-
vices are already in place, the main challenge is to
®nance, deliver and regulate services at higher levels of
care in a balanced and a€ordable manner. Second,
health systems in a number of countries (such as
Bosnia, Croatia, and Mozambique) need support in
the face or aftermath of devastating political or econ-
omic turmoil. Finally, Bank-funded projects increas-
ingly contribute to broad systemic reforms aimed at
making investments in health systems and programs
more sustainable and e€ective, while improving quality
and access for the poor. The following provides some
examples of the sort of health projects for which gov-
ernments are now borrowing from the World Bank.
Numerous projects are helping to ®ll serious gaps in
health care. The Indian Urban Slums Family Welfare
Project pays private organizations and medical prac-
titioners to provide services in slums and to train
21,000 urban health workers and local leaders. In
Malawi and Zimbabwe, in addition to support for nu-
merous other activities, health centers are being built
in unserved rural areas and community-based health
and population services are being expanded and sup-
ported. In Russia, basic medical equipment lacking
from ®rst and second level facilities is being ®nanced.
Investment in basic health services has remained the
major focus of the Bank's lending to the health sector
(over 75% of total lending).
Many examples could be cited where the focus is on
``post-basic'' interventions and improvements in
resource allocation. The Bank is helping the
Uruguayan e€ort to improve eciency and quality of
health care services (especially for the poor and unin-
sured) through institutional strengthening in the
Ministry of Health and a pilot e€ort to strengthen the
management of four public hospitals. Hungary has
used Bank funds to establish a School of Public
Health and a (tertiary level) Health Services
Management Training Centre, to equip 15% of hospi-
tals with management information systems, to set up a
cancer registry, health education in schools and to cre-
ate an information base and network focused on
tobacco policy. These activities are part of a project
that aims to improve health by reallocating resources
to cost-e€ective strategic public health activities and
selected clinical services. Many countries in Latin
America, the Caribbean, Asia and Africa are studying
health priorities in order to identify cost-e€ective
packages of essential public health and clinical services
for the poor and to provide data upon which to base
future ®nancing strategies (Bobadilla, 1997).
The Bank is also contributing intellectually and
®nancially to attempts to transform the health sectors
in many of the formerly socialist countries, and else-
where across the globe (Preker and Feachem, 1995).
These include health reform in Russia and the transfer
173
of ownership of health facilities in Croatia and
Hungary from the central government to local commu-
nities. In Zambia, the Bank helped the Ministry of
Health develop a strategic plan for sweeping health
sector reform to decentralize management, increase
autonomy of health facilities, and strengthen ®rst-level
service delivery. The program joins six other donors in
providing ®nancial support for the reform.
Similar initiatives are underway in Mozambique,
Ethiopia, Tanzania, Sierra Leone, and Ghana. Bank
sta€ are engaged in Argentinean e€orts to reform
health insurance, and have worked with researchers
and policy-makers to evaluate past Brazilian reforms
and facilitate broad national discussion and consensus-
building on an agenda for renewed reform e€orts
including improved ®nancing arrangements to tackle
the immense challenges that still face the health sector
in this country (World Bank, 1994).
Policy role
Policy advice has long been one of the ways that the
World Bank serves its clientele, usually through so-
called ``sector work'' Ð analytic studies of sectors or
speci®c issues, which invariably include policy and pro-
gram reform recommendations. These studies tra-
ditionally preceded loan preparation, and are an
important mechanism for Bank sta€ to study the
investment needs within the sector. They also stimulate
analysis, debate and consensus-building needed to
guide investment decisions. Formerly, sector work and
loan development fed o€ each other, but were usually
separate activities. Recently, policy analysis, advice
and sectoral reform are increasingly becoming an inte-
gral part of the loan process. This greater emphasis on
health sector policy and system-wide reform is the
result of both supply and demand factors.
Supply side factors
There are two ``supply side'' factors leading to
greater policy engagement by the Bank. The ®rst is a
general shift in the institution's approach to develop-
ment and aid.
Disappointing results, and the apparent unsustain-
ability of investments in many sectors, have led to an
emphasis on macro-economic and sectoral adjustment
to improve the environment within which investments
are made, and the bene®ts that ¯ow from them (Note
4). In health (as in other sectors) structural reforms are
often as necessary to better health outcomes as ad-
ditional investments in infrastructure, training, drugs
and other inputs. Comparisons across 69 countries of
life expectancy relative to per capita spending on
health care suggest that countries di€er signi®cantly in
174 J.A. de Beyer et al. / Social Science & Medicine 50 (2000) 169±176
the e€ectiveness of their health care systems
(Musgrove, 1996 and Note 5).
There is no single prescription for a successful health
care system. Several things clearly matter though:
measures that correct for market failure and that
ensure that interventions with large externalities are
available to the population; adequate spending on cru-
cial public health interventions such as immunizations
and prenatal care; the overall allocation of health
spending, especially making sure that high-cost inter-
ventions bene®ting relatively small numbers of people
do not divert resources from activities that bene®t
large numbers of people; and access to health care
which is largely determined by the nature, distribution,
cost and quality of public and private services. Where
health services are of poor quality, the private sector
crowded out or poorly regulated, or the state sector
inecient (perhaps su€ering from over-centralized de-
cision making, poor incentives, misallocation of
resources, and inadequate or inappropriate training of
health managers), broad systemic reforms have the po-
tential to do more to improve health and the function-
ing of health care systems than additional ill-chosen
investments in infrastructure or consumables.
The other ``supply side'' factor is the Bank's cumu-
lative experience of engaging in policy debate in over
80 countries, its research and analysis, and its good
working partnerships with the World Health
Organization, UNICEF and other institutions.
Improved knowledge and partnerships with other or-
ganizations, combined with the Bank's ®nancial
resources and leverage, have supported policy formu-
lation and health sector reforms in many countries.
Two policy domains where the Bank has been es-
pecially active are: the allocation of resources accord-
ing to cost-e€ectiveness principles; and rede®ning the
appropriate role of the state and private sector in
health care (Note 6).
Allocation of resources according to cost-e€ectiveness
principles
The analysis reported in ``Disease Control Priorities
in Developing Countries'' (Jamison et al., 1993) and
``Investing in Health'' (World Bank, 1993) on the rela-
tive cost-e€ectiveness of various health care interven-
tions has already helped many policy-makers in
developing countries focus scarce health care resources
on achieving better health outcomes. In this analysis, a
range of preventive and curative interventions are com-
pared on the basis of their costs and impact on disabil-
ity adjusted life years (DALYs). The cost of preventing
the loss of a disability adjusted life year can vary
hugely, depending on the cost and ecacy of the inter-
vention, the age group that the illness a€ects, and the
severity of the a‚iction. For example, measles immu-
nization and TB chemotherapy may cost as little as
US$10.0 per DALY, whereas some terminal or inten-
sive care interventions that prolong life for at best a
few days costs US$1.0 million or more per DALY
(Note 7).
Computing the cost per DALY of interventions pro-
vides an objective measure of why it makes more sense
to spend scarce health resources on Vitamin A sup-
plementation in northern Ghana rather than heart
bypass surgery; treat sexually transmitted diseases in
rural China rather than pay for high-tech cancer
therapy; or promote diet, lifestyle and tobacco-use
changes in Eastern Europe rather than install more
CAT scanners in the hospitals. Health policy makers
who care about cost-e€ectiveness and public health
impact must also consider the numbers of people who
will bene®t from proposed interventions. It may not
make sense to train and equip government health prac-
titioners to deliver services which, although highly
cost-e€ective, address only relatively rare conditions.
The cumulative impact on a society is therefore an im-
portant element in the ®nal resource allocation de-
cision-making process.
Reallocating public funds to interventions with wide
bene®ts and low costs per DALY enhances equity as
well as eciency because these interventions are often
of particular bene®t to poor people, women and chil-
dren. Although the optimal mix of interventions will
vary depending on country circumstances, in many
developing countries they are likely to include: immu-
nization; school-based services such as deworming and
distribution of micronutrient supplements; information
and selected services for family planning and nutrition;
programs to reduce tobacco and alcohol consumption;
regulation, information and limited public investments
to improve household environments (clean water, sani-
tation, drainage, indoor air pollution); AIDS preven-
tion, and a basic set of clinical services at least
including pregnancy-related care, TB therapy, STD
detection and treatment, care for the common serious
illnesses of childhood, and some treatment for minor
infection and trauma (World Bank, 1993; Bobadilla,
1997).
Rede®ning the appropriate role of the state and non-
governmental sector
The Bank is also focusing on assisting countries to
rede®ne the role of the State and the non-governmen-
tal sector in health care (World Bank, 1995). The
Bank's new Sector Strategy for Health, Nutrition, and
Population (World Bank, 1997) argues for greater gov-
ernment action in o€setting the negative e€ects of mar-
ket failure and facilitating partnerships with non-
governmental health care providers within a regulatory
 J.A. de Beyer et al. / Social Science & Medicine 50 (2000) 169±176
framework that prevents abuses and deterioration in
quality or safety.
Four recent Bank documents carry this analysis
further (Preker and Feachem, 1995; Musgrove, 1996;
Van der Gaag, 1995; Schieber, 1997). Preker and
Feachem describe the political economy of the tran-
sition which has swept across the health sector in
Central and Eastern Europe since the collapse of com-
munism. They provide sobering examples of the nega-
tive impact of excesses in both state and private sector
activities in the health sector, arguing for a mixed and
balanced approach. Musgrove sets out the economic
and poverty-related reasons for state intervention in
health care and discusses the extent to which the state
might inform, regulate, mandate, ®nance, and deliver
health services. He concludes that there are compelling
reasons for a signi®cant state role in health, but that
many governments ®nance and deliver too much, but
inform and regulate too little. Van der Gaag describes
10 examples of partnerships between the state and pri-
vate sector in health care provision in developing
countries that are being supported by the Bank. He
also gives a brief historical overview of their relative
roles in health (and education), notes that equity, qual-
ity and eciency are not always better or worse when
the government or private sector dominates, and gives
4 principles to help attain an optimal mix. Schieber
reviews the various dimensions of mobilizing adequate
®nancial resources for the health sector.
These analyses and descriptions aim to help policy-
makers and advisors in their deliberations and de-
cisions in an area where there is little published practi-
cal advice.
Demand side factors
Worldwide, there is a global pandemic of health sec-
tor reform occurring today. Countries are trying to
restructure and reform their health systems, some in
the context of broader changes such as those occurring
in transition economies, economic crises or post-con-
¯ict situations. Reform initiatives are a response to a
variety of political, technological, economic, demo-
graphic, epidemiological and social pressures, the im-
portance (or presence) of which varies across
countries. Sometimes the Bank's advocacy, in close
collaboration with other international institutions, acts
as an additional impetus to these reforms.
In the formerly socialist countries, the hope is that
market forces, greater diversity in supply, decentraliza-
tion and more individual choice will improve eciency,
responsiveness to health care needs and patient satis-
faction (Preker and Feachem, 1995). Health ®nancing
is becoming more diversi®ed, requiring new regulatory
and cost containment measures. In a number of
African countries Ð notably Mozambique, South
175
Africa and Zambia Ð political changes have catalyzed
restructuring of health (and other) systems. Argentina,
Brazil, Colombia and Ecuador are attempting to
restructure and reform health systems that were clearly
failing to improve health or satisfy demand in the face
of rising expectations, ®scal pressure and ¯awed health
insurance systems. China, with assistance from the
World Bank, is considering options for health ®nance
reform that would make basic health services more
accessible to the rural poor and other disadvantaged
populations (World Bank, 1996). It has been observed
in many countries that a successful shift to greater re-
liance on the private sector for health care also
requires a shift and strengthening in the role of the
state in policy making, regulation and quality control.
Although the problems that health sector reforms
are attacking are not new, pressure to address them
has come to a head in many countries. Fiscal pressures
have squeezed health budgets while several factors con-
spire to raise the demand for health spending. Rising
incomes lead to higher demand for health care. Many
middle-income countries that have secured access to
basic health services now face more dicult choices in
providing ``mid-level'' services, which tend to be much
costlier and which draw resources away from basic
care. New medical technology and rising expectations
exert powerful upward pressures on spending.
Dissatisfaction with the quality (and sometimes quan-
tity) of services is widespread and seems increasingly
to be voiced. Aging populations and the attendant epi-
demiological transition also raise health care costs. In
much of Africa especially, persistent high fertility and
population growth require expanded health spending
simply to maintain service levels.
Finally, not all health care reforms are based on
sound technical analysis. Many of the health care
reforms in Central and Eastern Europe and elsewhere
in the world are hotly debated, and some are unlikely
to improve outcomes or even the quality of health ser-
vices.
Preparing for the challenges of the 21st century
Several recent initiatives underscore the importance
and urgency that the Bank has attached to ®nding new
and more e€ective ways to assist developing countries.
These fall into ®ve categories:
. developing a new strategic focus on clearly de®ned
priorities in the health sector which builds on the
comparative strength of the Bank as a multi-sectoral
and global agency;
. working more closely with clients in analyzing pro-
blems, de®ning solutions and implementing change;
. increasing selectivity in de®ning the Bank's product
176 J.A. de Beyer et al. / Social Science & Medicine 50 (2000) 169±176
line of interventions in the health sector to respond
most appropriately to current demand and future
needs;
. adapting the Bank's management culture, knowledge
base, sta€ development policies, business processes
and portfolio performance to the needs of the health
sector; and
. providing support to other organizations and leader-
ship in spearheading major international initiatives
in the health sector with the potential for making a
signi®cant global impact on health outcomes.
It is hoped that these e€orts will allow the Bank to
become more e€ective in assisting developing countries
to break the vicious cycle of poor health, low pro-
ductivity and poverty.
Notes
1. Throughout this article, health includes health,
population and nutrition. Many other Bank-sup-
ported activities (for example poverty reduction,
housing, water and sanitation, and education of
girls) also a€ect health.
2. Good health and longer life expectancy encourage
investment in education and other human capital.
Together these raise productivity and income.
Information on and access to contraception, along
with low child mortality and more education (es-
pecially for women), are important factors for smal-
ler family size. This a€ords greater human capital
investments in the next generation (Psacharopoulos,
1995).
3. The average annual value of new loans for health
over the three years 1993±1995 was $1.3 billion, 6%
of total Bank lending. This increase to $1.6 billion
and 6.5% during 1996±1999. This trend is expected
to continue.
4. Concern has often been expressed that macroeco-
nomic structural adjustment reduces spending on
health care and damages health. The Bank is cur-
rently reviewing the evidence (Van der Gaag and
Barham, 1998). Today many Bank-supported
adjustment programs require governments to protect
the budget share or level of spending on health, or
to increase the allocation to basic health services
that bene®t the poor particularly.
5. The analysis controls for per capita income, which
is the most signi®cant predictor of life expectancy.
Health outcomes have numerous determinants not
included in the analysis reported, but the results are
robust.
6. In these areas and others, the Bank works closely
with and depends on researchers, practitioners and
other professionals and policy-makers across the
world.
7. There are of course several other methods for asses-
sing the burden of disease and cost-e€ectiveness of
interventions.
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