The Inevitable Shift

This paper explores the challenges of substituting dwindling aid for health (Development Assistance for Health, DAH) with domestic resource mobilisation (DRM) in 2025-26. While international efforts have focused on the long-term goal of making health financing more sustainable through domestic sources, there has been less consideration of the short-term capacity of governments’ fiscal and institutional systems to accommodate sudden aid declines. 

Drawing on evidence from global health financing and fiscal policy, as well as evidence reviews and early country experiences of aid transition, this paper demonstrates that changes in tax revenue, public spending, procurement, workforce, and health-sector purchasing systems all take time and cannot be expected to offset an external aid shock without careful planning and phased implementation. 

The key elements for a sequenced transition from aid dependence are affordability, staggered and predictable financing, safeguarding essential services, verification of additional domestic resources, and transparent monitoring.

The paper concludes with research questions and policy areas for further examination of the effects of changes in health financing on health systems, populations, services, and demand. 

The Inevitable Shift