The majority of public health spending in many low- and middle-income countries is executed by subnational governments. Efforts to increase health spending to achieve universal health coverage therefore need to take into account the efficiency, effectiveness and equity of health spending at the subnational level. However, the importance of subnational health expenditures has often been overlooked in international discussions on health financing and aid.

Fragmentation of donor assistance also remains a feature of the global health landscape, stretching the capacity of fragile and low-income countries, including their subnational governments, to manage the priorities and programmes of multiple global health actors effectively.

This paper looks at the adequacy and complementarity of national and international financing for subnational health services in Uganda over a three-year period (2015–2018), based on research conducted by ODI for the Government of Uganda. ODI found that national fiscal transfers for subnational health care delivery were inequitably distributed between Local Governments, and that their inadequacy was constraining the ability of Local Governments to achieve health outputs.

ODI found that donors provided significant levels of health funding to Local Governments outside of the government fiscal transfer system. However, this funding was provided in a fragmented manner that reinforced the distributional inequities found in the fiscal transfers without necessarily improving their efficiency. This paper concludes with lessons for policy-makers.

Paper by the Overseas Development Institute