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This document discusses the debate around "vertical" versus "horizontal" financing of health services in developing countries. It argues that a "diagonal" approach, which aims to achieve disease-specific results through strengthening health systems, offers a better solution. The Global Fund and new International Health Partnership initiatives may help broaden the scope of Global Fund financing in this diagonal direction. However, this evolution faces challenges due to limited Global Fund resources and potential constraints from the IMF on countries' ability to expand health spending even with increased foreign aid. The authors argue for a gradual transformation of the Global Fund into a more diagonal and horizontal fund, while maintaining features like civil society participation that help ensure aid additionality.






