Economic Implications of Inertia on HIV/AIDS and Benefits of Action

The HIV epidemic affects people in their most productive ages with adverse impacts on life expectancy, the productivity of the labour force and household incomes. It has not always been possible to measure the economic impact of AIDS empirically with a reasonable degree of precision. Moreover, while there is some evidence of negative individual, household and firm level impact, the empirical evidence on the impacts at the sector and national levels is still weak. While purely humanitarian considerations may be relevant in supporting investments in HIV/AIDS intervention, they may not always appear to be so for finance ministers and planners in developing countries. To justify spending more on policies to address HIV/AIDS in a regime of tight resource constraints, it is sometimes important to justify investments in AIDS prevention and treatment as being more critical relative to other investments. To the extent that HIV/AIDS has large adverse impacts on economic indicators and other socially desirable goals of society, policy action may be desirable, preferably early in the epidemic, rather than later.