Journal Article

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

Paul Collier and Olivier Sterck

in Oxford Economic Papers

Volume 70, issue 2, pages 353-374
Published in print April 2018 | ISSN: 0030-7653
Published online February 2018 | e-ISSN: 1464-3812 | DOI: https://dx.doi.org/10.1093/oep/gpy001
The moral and fiscal implications of antiretroviral therapies for HIV in Africa

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  • Economics of Health
  • Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
  • Economic Development

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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.

Keywords: I15; I18; E61; O11

Journal Article.  10318 words.  Illustrated.

Subjects: Economics of Health ; Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook ; Economic Development

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