Saturday, June 01, 2002
The WHO and its budget: Krugman defender Jeff Hauser is disputing my analysis of the WHO's budget as spending a large portion of its funding for administrative costs. The fact that Hauser and I can't easily determine exactly how much money is going to administrative costs and how much is spent actually helping the poor says something about the ambiguities in the WHO document. [Requires Adobe Acrobat.]
From Hauser's comment:
Going through Table 3 on pages 14-15, it seems to me as if $85M of $2.2B is unquestionably administrative, and it is possible some fraction of other expensitures [sic] is administrative as well.
I've stared at that table for 45 minutes and I don't see where Hauser gets the $85 million figure. Looking at the last line on page 14, I see: "Subtotal -- General Management: 201 459" (Note that the chart is in $thousands) That says to me $201 million of $2.2 billion is undoubtedly administrative. Admittedly less than my earlier 33 percent, but more than twice as much as Hauser's $85 million.
If you look up a few lines you'll also see the following: "Subtotal -- External relations and governing bodies: 57 746." This sounds like bureaucratese for public relations, so I would feel pretty safe adding this into the overhead costs.
Hauser pointed out that by assuming that everything budgeted to headquarters is overhead, I had ignored the possibility that grants to nongovernental organizations might come out of that piece of the pie. I concede the point. Grants may come out of the HQ budget. I can't say for sure, and neither can Hauser, because even the detailed WHO budget (found here) doesn't indicate which budget grants are awarded from.
I would hope that Hauser is right and that the vast majority of the funds allocated to headquarters are actually spent on really making a difference in poor people's lives and not for making life easy for some bureaucrats in France. But everyone will have to excuse me if I'm skeptical. It's just as likely that grant funding comes from the regional and country budgets. Also, there is the likelihood that a portion of the money for each of the grants that are awarded is also overhead.
It would take a CPA thousands of hours and documents not available online to determine how much is spent on administrative costs and how much is spent actually helping people.
I believe I've safely established that the minimum spent on administration, according to WHO's own documents is approximately 12 percent. I would not be surprised if the actual number was three or four times that amount.
On a related note: While looking for information regarding WHO grants, I came across some information on who gets grants and what they get them for. You can see a recent list here. The thing that struck me as I looked down the list was how much it looked like something you would see from the National Institutes of Health. If this sort of research is what counts as foreign aid, then I think that the entire budget for the NIH should be added to the United States' foreign-aid contributions.
A final note: Several people commenting on Krugman's column have pointed out that, unlike some other countries, individual Americans give money to charities in addition to that allocated as foreign aid by the government. Here's a case in point.