Valuing Institutional Change in Health Economic Evaluation: Examples from Programs to Tackle HIV/AIDS in Southern Africa

Posted: 15 Jun 2007

See all articles by Stephen Jan

Stephen Jan

University of Sydney - George Institute for Global Health

Date Written: June 2007

Abstract

There has been growing interest in the application of institutionalist perspectives in the health economics literature. This paper investigates the institutionalist notion of social value and its use in economic evaluation with particular reference to programs to address HIV/AIDS and gender violence in Southern Africa. Institutions are the rules which govern the conduct between individuals, groups and organisations. Their social value stems from their capacity to reduce the uncertainty in human interactions thereby both reducing transaction costs and, importantly, enabling the initiation and sustainability of various activities. Furthermore, institutions tend to be formed around certain ethical or moral positions and act to bind future decision making to these positions. Incorporating such notions of social value within a conventional welfare-based measure of benefit is problematical as institutional development is not necessarily consistent with individual utility. An institutionalist approach allows for such processes to be taken into account and introduces these additional domains into economic evaluation.

Two programs are examined: 1) Intervention with Microfinance for AIDS & Gender Equity (IMAGE), is a community development and health education intervention built onto a microfinance program targeting poor rural women. The aim of the intervention was to empower such women through enhancing knowledge alongside economic opportunities to generate the skills and resources to challenge community norms around gender violence and HIV and; 2) Refentse, an intersectoral intervention between the health and legal sectors to improve the delivery of counselling, care, support and referral services, including HIV prophylaxis, for rape survivors within a rural community in South Africa. The intervention was aimed at co-ordinating care within a rural hospital and improving linkages between health service providers and other social services (e.g. police, social workers) by changing organisational routines and altering potentially damaging social norms and beliefs that had previously hampered the delivery of such services.

The interventions studied effected institutional change in two ways. Firstly, they facilitated certain 'flow-on' activities because resources consumed in establishing the initial intervention had effectively resulted in transaction cost savings across other activities. In IMAGE, such cost offsets could be identified in the scaling up of the intervention. The other aspect of institutional change was 'intrinsic value' - the degree to which such change reflects a set of values that are deemed to be positive. Within Refentse, the resulting changes in organisational and individual norms (and subsequent behaviours), were factored into a cost-consequences analysis.

The feature of the approach outlined here is that it is based on the identification of institutional change as a source of value and therefore offers features that potentially should be factored into economic evaluation. The examples highlight how this approach can be applied.

Keywords: Institutionalism, social welfare, transaction costs

Suggested Citation

Jan, Stephen, Valuing Institutional Change in Health Economic Evaluation: Examples from Programs to Tackle HIV/AIDS in Southern Africa (June 2007). iHEA 2007 6th World Congress: Explorations in Health Economics Paper, Available at SSRN: https://ssrn.com/abstract=992980

Stephen Jan (Contact Author)

University of Sydney - George Institute for Global Health ( email )

Sydney
Australia

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