PEPFAR Spending Types and Reduction in HIV Infection Rates

Since 2004, PEPFAR has invested over $100 billion in fighting HIV, primarily targeting sub-Saharan Africa. This study examines the effectiveness of spending types as defined by the program. In this study, I take the spending data published by PEPFAR that was categorized into key focus areas that include (1) Care & Treatment, (2) Testing, (3) Prevention, (4) Socioeconomic, and (5) Above-site, Program Management and Other, and estimate the effectiveness of these categories on a key outcome variable: new HIV infections. I also estimate the same regressions along two dimensions: (1) pre and post PEPFAR 2.0 that was implemented in 2014, and (2) the 12 sub-Saharan focus countries versus the non-sub-Saharan countries. Data was collected from public sources including PEPFAR, the GHO, and the World Bank and a total of $61.5 billion in spending was identified from 2005-2021 covering 54 target countries. Main Outcome(s) and Measure(s)The marginal dollar spent on prevention activities experienced the highest incremental effect of reducing new HIV infections in targeted countries from 2005-2021. The coefficient on Prevention spending was -0.715 (t-stat of -2.83), which was highly significant at the 1 percent level. However, much of this effect was driven by pre-2014 spending before PEPFAR 2.0 was implemented. Post 2014, socioeconomic programs were measured to have the greatest marginal effect driven by non-sub-Saharan countries. Overall effectiveness of spending increased post PEPFAR 2.0 for non-Sub-Saharan countries but declined for sub-Saharan countries.