AIDS in Botswana: Evaluating the general equilibrium implications of healthcare interventions

This paper reports an analysis of the effects of health care interventions designed to reduce the impacts of the HIV/AIDS epidemic on the Botswana economy. The analyses were conducted using a recursive dynamic computable general equilibrium model for Botswana within which was embedded a compartmental epidemiological model. The health care interventions examined are reductions in other sexually transmitted diseases (STDs) that reduce the probability of HIV transmission and a mass media health education programme that reduces the number of new sexual partnerships being formed. While the policy scenarios examined are, necessarily, somewhat stylised, the results indicate both the devastating adverse effects of the epidemic and the substantial potential benefits of the interventions. Without interventions disposable household incomes per capita are up to 50 per cent less than they would have been in 2020, but with these interventions the adverse effects of the epidemic are more than halved.