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close this bookThe Value of Family Planning Programs in Developing Countries (RAND, 1998, 98 p.)
close this folderChapter Four - THE COST OF FAMILY PLANNING
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View the documentPublic Expenditures
View the documentGovernment Involvement
View the documentDonor Commitments
View the documentContinuing Challenges

Public Expenditures

Public expenditures on family planning in developing countries were estimated by several sources for 1990 at US$4-5 billion and are somewhat higher now (World Bank, 1993a). However, these estimates are difficult to make with confidence. Apart from the vagaries of government budgetary data in developing countries, the estimates are complicated by the difficulty of separating family planning from other health services, by the multiplicity of agencies involved in family planning and the many channels through which they may be funded, and to some extent by the definition of what activities should be counted. For the Cairo population conference, UNFPA (1994) estimated the cost of family planning programs in the year 2000 at US$10.2 billion and then added US$5.0 billion for reproductive services that can be provided as part of primary health care; US$1.3 billion for prevention of sexually transmitted diseases, including HIV/AIDS; and US$600 million for population data collection, analysis, and policy development.1

1Agency estimates of needed resources in their areas should normally be treated with caution and some skepticism. The family planning cost estimate appears somewhat high in comparison with 1990 estimates (on which there is reasonable consensus), but the reproductive health-services cost estimate is undoubtedly far too low. Various joint costs are counted under family planning rather than reproductive health (and further development of the methodology for apportioning costs is needed). In addition, the estimates for reproductive health are not meant to cover emergency obstetric services above the primary health-care level, which are critical in reducing maternal mortality. No comparable estimates of overall costs developed independently of funding agencies are available.

Expenditures are usually tied to the number of users and are expected to grow as the reproductive-age population grows - by about 2 percent a year currently, although the rate will slow to 1 percent around 2015. But one also has to allow for changing program costs. The initial years of a program require the heaviest investment; as the number of contraceptive users grows, it can become easier to serve them. But additional expenditures may be necessary to maintain the program's momentum and to reach new user groups, as well as to improve service quality and expand related reproductive health services.

Public family planning expenditures are quite variable across countries in comparison to public expenditures on health. Estimates around 1989 suggest that family planning is most often around 2 percent of the government health budget. However, many of the countries covered in these estimates have quite weak programs, and the proportion goes up to 20-30 percent for some extensive (and suc -cessful) programs, such as those in Indonesia and Bangladesh (Ross et al., 1993). Some countries have therefore had considerable scope to fund their family planning programs out of health budgets, but others have required considerable outside assistance.

Funds from international donors cover a fourth to a third of public expenditures on family planning throughout the developing world (the overall proportion is low because China and India provide so much of their own family planning resources). Donor commitments - designated support for population and family planning from industrial countries, as well as funds passing through multilateral institutions and development banks, plus funds from private donors - fluctuate from year to year. They appeared to increase substantially, to US$1.37 billion, the year after the 1994 Cairo conference (as they did after the previous world conference in 1984). However, comparisons are complicated by the expanded mandate from the Cairo conference to tackle reproductive health, funding for which was counted for the first time in 1995 and found to comprise 23 percent of donor commitments. Not counting such funding, donor commitments actually fell from 1994 to 1995 (by 7 percent in real terms; funding trends in current dollars are shown in Figure 13). Even counting reproductive health funding, substantially larger increases will be needed to meet the Cairo conference goal of donor support for a third of the cost of population and reproductive health programs by 2000 (UNFPA, 1997b).

Per capita, developing countries receive US$0.15 from international donors for population and reproductive health programs, but regional variation is considerable. Sub-Saharan Africa (with its relatively newer programs and smaller populations) receives more and absorbed almost 80 percent of the increases in 1995, and Asia (with older programs and larger populations) receives less (Figure 14).

Figure 13 - Trend in Donor Assistance for Population Programs and Goal for 2000 (billion U.S. $)

SOURCE: UNFPA (forthcoming) for trend and UNFPA (1994) for goal.

Government and donors do not cover all the costs of family planning. Households pick up some proportion of the costs, about as much as donors do, by one earlier estimate (Bulatao, 1985). In countries where commercial contraceptive supply is limited, the contraceptives available are unaffordable for most. But prices at pharmacies and smaller outlets decline as the number of users increases, and price decreases do stimulate demand (Lewis, 1985). The cost of public programs also goes down. The cost per user of program-supplied modern methods may be estimated roughly at US$20, but may range from US$50 to under US$15 as the number of contraceptive users increases (Figure 15).

To assess whether there are cheaper ways to reduce fertility, comparisons are sometimes made between family planning and other development interventions. For instance, the cost-effectiveness of family planning for reducing fertility has been contrasted with that of primary schooling for girls in 16 countries, mostly Asian and Latin American. The median cost of averting a birth through a family planning program, at US$58, was much lower than the median cost of averting a birth through female education, at US$548 (Cochrane, 1988).2 A similar comparison of family planning with several child-survival initiatives, including immunization, maternal and child health programs, and infant and child feeding programs, gave a similar result. The lowest-cost alternative among these mortality-reduction initiatives was still more expensive, per birth averted, than family planning, with only one exception across countries (measles immunization in Kenya). The median cost for family planning was again about a tenth of the median cost for mortality reduction (Cochrane and Zachariah, 1983).

2Average costs were used because marginal costs were not available.

Figure 14 - Trend in What Developing Regions Receive per Capita in Donor Support for Population Programs (constant 1990 U.S. $)

SOURCE: Estimated from UNFPA (forthcoming).

Figure 15 - Program Cost per Contraceptive User by Number of Users, Selected Countries

SOURCE: Unpublished studies of the EVALUATION Project at the University of North Carolina at Chapel Hill.

Such comparisons are seriously limited, since only the fertility effect, not the other effects of the interventions, is taken into account.3 What they point to, nevertheless, is the inability of general education and health programs to satisfy unmet need directly. Instead, they create over time a general desire for smaller families and the social climate in which such desires can be realized and therefore are a useful complement to family planning programs and have contributed powerfully to fertility decline. But their effects involve long lags: The long delay between a girl's schooling and her childbearing, and the many things that must intervene to allow her to limit her fertility, as opposed to the relatively immediate effects of family planning programs, account for the latter's advantage in such comparisons as those above.

3Knowles (1997) considers this "the main shortcoming of this type of analysis ... that the alternative investments compared to family planning provide a wide range of private and social benefits not incorporated into the analysis, so that the exercise risks being irrelevant." Arguably, however, family planning also provides a range of other benefits besides lower fertility, such as reduced mortality (for which its cost-effectiveness is noted below). Knowles does make other important points in his broad critique of such work, noting, for instance, that the alternatives to government financing are seldom clearly modeled. In addition, data for comparative analyses, such as the specific ones cited, always have some deficiencies.