PEPFAR and the Costs of Cost-Benefit Analysis

"In the early aughts, economists said it was a bad use of money to send antiretroviral drugs to treat HIV in low-income countries. Twenty years later, we can ask why they got it wrong."

In this new piece, Justin Sandefur writes about PEPFAR – the large US-led program to tackle AIDS in poor countries – for Asterisk magazine. It expands on his blogpost on CGDev last year.

The piece describes the arguments economists made in the early 2000s against PEPFAR. Some recommended against PEPFAR because they believed it was not cost-effective, that it would crowd out other foreign aid funding, and that prevention would be more cost-effective than treatment.

However, as the piece explains, the costs dropped significantly as the program scaled up, the program opened up new funding (such as for malaria and tuberculosis), and the evidence behind other prevention approaches that were recommended was often weak.

[Although it's not mentioned in the piece, it's also worth adding that antiretroviral therapy is actually both a treatment and a preventive measure. It reduces the replication of HIV, and also reduces the spread of HIV.]