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This technical report is an analysis of current trends and theories in consumer protection from both a legal and economic perspective. Traditional economic theory, especially the work of Akerlof (1970), suggests there are situations in which consumer protection is necessary to maintain healthy markets. Still, debate continues on the best methods of consumer protection. As an example, some economists argue for information disclosure, others paternalism, and still others so-called soft- or libertarian-paternalism. Any of these forms can be acheived through different bodies including government agencies, consumer associations, self-regulation, statutory and non-statutory standards bodies, ombudsman and professional organizations. Finally, the transition to digital economies has presented new challenges for consumer protection including security, privacy, complex liability chains, and the complexity of the products themselves.
The share of private sector funding, relative to public sector funding, for drug, vaccine, and diagnostic research & development (R&D) differs considerably across diseases. Private sector investment in overall health R&D exceeds $150 billion annually, but is largely concentrated on non-communicable chronic diseases with only an estimated $5.9 billion focused on "global health", targeting diseases that primarily affect low and middle-income countries (LMICs). We examine the evidence for five specific disincentives to private sector global health R&D investment: scientific uncertainty, weak policy environments, limited revenues and market uncertainty, high fixed and sunk costs, and downstream rents from imperfect markets. Though all five may affect estimates of net returns from an investment decision, they are worth examining separately as each calls for a different intervention or remediation to change behavior.
Donor countries and multilateral organizations may pursue multiple goals with foreign aid, including supporting low-income country development for strategic/security purposes (national security, regional political stability) and for short-and long-term economic interests (market development and access, local and regional market stability). While the literature on the effectiveness of aid in supporting progress on different indicators of country development is inconclusive, donors are interested in evidence that aid funding is not permanent but rather contributes to a process by which recipient countries develop to a point that they are economically self-sufficient. In this report, we review the literature on measures of country self-sufficiency and descriptive evidence from illustrative case studies to explore conditions associated with transitions toward self-sufficiency in certain contexts.