Debt payments crowd out women’s health spending as donors retreat, study finds

Government spending on women’s health in the world’s poorest countries is being squeezed from two directions at once, according to a new modelling study of 71 low- and lower-middle-income countries. The research, published in Frontiers in Global Women’s Health, finds that rising debt service payments cut spending on women’s health far more sharply than they cut overall health expenditure, and that projected donor withdrawals could leave virtually no low-income country on track to close its women-specific universal health coverage financing gap by 2030.

The study constructed a balanced panel of 71 countries — 32 low-income and 39 lower-middle-income — covering 497 country-years from 2018 to 2025, drawing on WHO, IMF, World Bank, OECD, IHME and DHS data. A fixed-effects instrumental-variable model, using lagged government health expenditure and donor-alignment instruments, estimated the drivers of government expenditure for women’s health. The central estimate was stark: each 1-percentage-point increase in debt service as a share of GDP was associated with a 4.2 percent reduction in spending on women’s health (β=−0.042, p<0.001). That effect significantly exceeded the corresponding reduction in general health expenditure (β=−0.012, p=0.032; difference p=0.008), suggesting debt burdens fall disproportionately on the women’s health budget line rather than being spread evenly across the health system.

The financing picture the study describes is one of stagnation. Median combined spending in low-income countries rose only marginally over the period, from US$15.90 in 2018 to US$16.40 in 2025. The authors defined the women-specific universal health coverage financing gap as combined spending reaching at least 80 percent of sex-disaggregated benchmarks — US$62 for low-income countries and US$95 for lower-middle-income countries. Using a Cox survival model that incorporated announced donor reductions under probabilistic scenarios, the baseline projections found that no low-income country and 23.1 percent of lower-middle-income countries were projected to close their women’s health financing gaps by 2030.

Two levers dominated the projected outcomes. Each 1 percent decline in development assistance for health was associated with a 6.1 percent reduction in the probability of gap closure (HR=0.939, p=0.002), while fiscal-space expansion nearly tripled closure likelihood (HR=2.947, p=0.018). The study also linked spending to health outcomes in its validation step: patient-level DHS validation showed that a US$10 increase in predicted spending was associated with a 4.2-percentage-point increase in skilled birth attendance (95% CI 2.8–5.6). Validation further included out-of-sample forecasting and placebo tests.

The authors conclude that debt service disproportionately crowds out women’s health expenditure, highlighting what they describe as gendered consequences of fiscal adjustment, and that abrupt donor withdrawal would make universal health coverage financing gaps virtually unattainable in aid-dependent low-income countries without domestic reprioritization. They point to debt-for-health swaps, phased donor transitions, and increased women’s health expenditure shares as critical responses. Under one scenario, raising the women’s health share of spending by at least 2.5 percentage points could increase the low-income gap-closure probability to approximately 31 percent by 2030, with a range of 22 to 41 percent. As a modelling study based on country-level panels and projections incorporating announced donor reductions, the findings describe estimated associations and projected probabilities rather than measured causal effects of any specific policy change, and the projections depend on the assumptions built into the donor withdrawal scenarios.

Subject of Research: Debt service and donor withdrawal effects on government financing of women's health in low- and lower-middle-income countries

Article Title: Why women’s health financing collapses when donors retreat and interest payments rise

Article References: Sethy, M. (2026). Why women’s health financing collapses when donors retreat and interest payments rise. Frontiers in Global Women's Health, 7, Article 1894105. https://doi.org/10.3389/fgwh.2026.1894105

Image Credits: AI Generated

DOI: 10.3389/fgwh.2026.1894105

Keywords: debt service, women's health financing, development assistance for health, universal health coverage, low-income countries, lower-middle-income countries, government health expenditure, fiscal space, debt-for-health swaps, skilled birth attendance, health financing, Frontiers in Global Women's Health