Absorptive capacity and disbursements by the Global Fund to Fight AIDS, Tuberculosis and Malaria: analysis of grant implementation.

BACKGROUND: The Global Fund to Fight AIDS, Tuberculosis and Malaria was launched in 2002 to attract and rapidly disburse money to fight these diseases. However, some commentators believe that poor countries cannot effectively use such resources to increase delivery of their health programmes-referred to as a lack of absorptive capacity. We aimed to investigate the major determinants of grant implementation in developing countries.

METHODS: With information available publicly on the Global Fund's website, we did random-effects analysis to investigate the effect of grant characteristics, types of primary recipient and local fund agent, and country attributes on disbursements that were made between 2003 and 2005 (phase one of Global Fund payments). To check the robustness of findings, regression results from alternative estimation methods and model specifications were also tested.

FINDINGS: Grant characteristics--such as size of commitment, lag time between signature and first disbursement, and funding round-had significant effects on grant implementation. Enhanced political stability was associated with high use of grants. Low-income countries, and those with less-developed health systems for a given level of income, were more likely to have a higher rate of grant implementation than nations with higher incomes or more-developed health systems.

INTERPRETATION: The higher rate of grant implementation seen in countries with low income and low health-spending lends support to proponents of major increases in health assistance for the poorest countries and argues that focusing resources on low-income nations, particularly those with political stability, will not create difficulties of absorptive capacity. Our analysis was restricted to grant implementation, which is one part of the issue of absorptive capacity. In the future, assessment of the effect of Global Fund grants on intervention coverage will be vital.