Can the well-intentioned actions of NGOs or other voluntary organizations decrease the security of the populations they serve? This possibility has been raised in a striking manner in the case of health care.

Public-health institutions take three broad forms: first, public-sector institutions that include domestic governments as well as such international public institutions as the UN (WHO, UNICEF, UNAIDS) and the World Bank; second, private-sector institutions that include the multinational pharmaceutical companies; and third, nongovernmental health organizations that include NGOs, academia, and philanthropy.

In the international public-health arena, public-private partnerships - such as the International AIDS Vaccine Initiative (IAVI) or the Global Alliance for Vaccines and Immunizations (GAVI) - increasingly try to solve problems that such public institutions as the World Health Organization (WHO) addressed a generation ago.

IAVI is a public-private partnership founded in 1996 by several major U.S. foundations. Its aim is to produce an AIDS vaccine for the developing world. IAVI seeks to move beyond a "social failure" by public-sector institutions as well as a "market failure" by private-sector institutions with respect to AIDS research through "carefully crafted" nonprofit partnerships between private, public, and NGO actors.(1)

GAVI is a committee founded in January 2000 that seeks to develop new vaccines for children in the developing world. Its members include major pharmaceutical companies, the World Bank, the WHO, UNICEF, and the Bill and Melinda Gates Foundation. The Gates Foundation provides most of GAVI's financing, which is roughly $1.5 billion. GAVI appears to be the most prominent successor to the publicly funded UNICEF programs for child welfare in the 1980s.(2)

These initiatives bring together private- and public-sector actors in new ways to address public-health challenges in the developing world. Naturally, this shift away from public institutions raises questions about the sustainability of such nongovernmental initiatives as well as their accountability to the populations they serve.

Voluntary assistance programs do not face serious sanctions if they fail to deliver to the populations they promise to serve, whereas a private-sector firm loses profits if it fails to deliver promised goods or services, and a public institution such as the WHO must answer to its member states if it fails to achieve its stated aims. A voluntary organization is thus less likely than a public or a private institution to be forced to reckon with unintended consequences of its actions.

The recent history of corporate drug donations illustrates these potential problems with voluntary initiatives. The most successful corporate drug donation program is Merck's program for the drug ivermectin - a drug used to treat river blindness. Merck works with a nonprofit organization, the Carter Center in Atlanta, which administers the distribution of the donated drugs to organizations in the developing world. Merck has been praised for avoiding the potential pitfalls of such programs, including a lack of sustainability.(3)

AIDS-related drug donation programs have not been as successful. When the magnitude of the AIDS crisis in Africa and Asia became clear in the late 1990s, a controversy erupted over the prices charged for the antiretroviral drugs (ARVs) used to treat the disease. Starting in the year 2000, competition from generic producers in India and Brazil forced the average branded price of an AIDS triple-combination therapy from $10,439 per year to less than $1,000 per year. Starting in May of 2000, pharmaceutical companies that owned the patents on various ARVs announced a number of voluntary price reduction programs for residents of poor countries in consultation with the WHO.

These announcements received a lot of attention in the international press. In practice, unfortunately, it has proven difficult for practitioners in the field to acquire the AIDS drugs at the announced prices. While the voluntary donation programs for AIDS drugs appear well intentioned, there is little incentive for the companies involved to ensure they consistently make the drugs available as promised. The companies face few (if any) consequences if they do not set up an infrastructure to provide the drugs at the prices announced.

In addition, the system of discounts is enormously complicated. As the well-known NGO, Medicins Sans Frontieres, notes in a recent report, "The rapidly changing prices of antiretroviral drugs result from numerous discounts made by the pharmaceutical companies that vary in source and nature and are increasingly difficult to follow. Pharmaceutical companies have acted independently, within the framework of the Accelerated Access Initiative, or through direct negotiations with governments or health care providers. Different restrictions apply to each of the product discounts."(4) The Accelerated Access Initiative, founded in May 2000, is a public-private partnership between five pharmaceutical companies and several United Nations organizations to explore ways to accelerate and improve the provision of HIV/AIDS-related care and treatment in developing countries. The pharmaceutical companies involved are Boehringer Ingelheim, Bristol-Myers Squibb, Glaxo Wellcome, Merck & Co., Inc., and F. Hoffmann-La Roche.

Meanwhile, interest in other proposed remedies has lapsed following the announcements of the voluntary price reductions. For example, UNICEF manages a centralized purchasing system for the vaccines and contraceptives it provides to developing countries. The UN could establish a similar system for ARVs to negotiate lower prices for bulk purchases. These prices would reflect the UN's monopsony power and would result from a market transaction rather than a voluntary transaction that depended only on the goodwill of the companies involved. A second proposed remedy noted that generic production of ARVs would probably be more efficient at getting drugs to health care organizations than the current piecemeal voluntary price reductions. An agreement where patent holders sold licenses to generic producers in order to supply only less developed countries might be more effective than the current voluntary system. These pharmaceutical companies' charitable actions, however well intentioned, may have eroded the momentum building in the international public-health community to find a more sustainable, long-run solution to the AIDS drug-pricing problem.

In the near term, NGOs can meet essential needs that otherwise would not be met and can save lives that otherwise could be lost. But, as Emma Rothschild notes in the excerpt from her article "What Is Security?", "The main objection to NGOs as a source of security… follows from the defining characteristic of an NGO as a voluntary organization."(5) Individuals served by a voluntary organization achieve security through "relations that are only tenuously political. The security of an individual in one country is to be achieved through the agency of a state (or a substate group, or a suprastate organization) in another country. The individual is thereby very much less than a co-lawmaker… in the political procedure that ensures security."(6) This is most insidious, in her view, if this process "has the effect of subverting a local and potentially more resilient political process." To the extent that local politics constitute the "only consistent source of continuing security," the work of an NGO can worsen the insecurity of populations served.(7)

I recently had a conversation with an executive at a major philanthropic foundation, in which he expressed concern that the money his foundation directs through NGOs to developing countries erodes these countries' potential to develop robust local political institutions. The most promising young people from developing countries go to work for international NGOs (where the money is), he felt, rather than becoming involved in (and perhaps attempting to reform) local political institutions.
While NGOs and other voluntary organizations clearly meet critical needs in the populations they serve, it is worth reflecting on distortions they may introduce into long-term political processes, both local and international.

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1.See Tim G. Evans and Lincoln C. Chen, "Partnerships for Global Health: Progress or Setbacks in Democratic Practice?" (June 24, 2001). mimeo, 4.
2.Ibid, 4.
3.Ibid, 5.
4.See Carmen Perez-Casas, Cecile Mace, Daniel Berman, and Julia Double, "Accessing ARV's: Untangling the Web of Price Reductions for Developing Countries." Medicins Sans Frontieres Campaign for Access to Essential Medicines Report (November 21, 2001), 4.
5.See Emma Rothschild, "What Is Security?" Daedalus, vol. 124, no. 3 (Summer 1995) 81.
6.Ibid, 70.
7.Ibid, 71.

Rebecca Hellerstein is a GSC Dissertation Fellow researching and training on her project entitled "Conditions of Insecurity: Welfare Effects of Enforcement of Pharmaceutical Patent Rights in Developing Countries." She is currently working with the Campaign for Access to Essential Medicines of the NGO Doctors without Borders (MSF in Paris). She is a doctoral student in the Economics Department at the University of California at Berkeley.