One of the first lessons I learnt after leaving university was that ministries of economy and finance hold the pen in most—if not all—policy decisions. Over the past 20 years of advising think tanks, researchers, and funders aiming to shape sector-specific policies, I have consistently—and perhaps tediously—argued that their strategies must include the relevant Ministry of Economy and Finance (MoEF) as a key audience for their advisory, communications, and advocacy efforts.
Until the MoEF acknowledges a problem or sees value in a proposed solution, the necessary funding is unlikely to materialise. Too often, however, policy research communities develop in silos, disconnected from other sectors—including the economic policy domain.
A very similar auricle could be written about lawyers. More often that not policy recommendations fails to address the legal obstacles to their implementation.
Research communities and conferences focused on education, health, or climate change tend to be marked by disciplinary and sectoral homogeneity. Conference keynote speakers are often senior figures within their own fields, and panellists increasingly share similar academic and professional backgrounds. They speak, in essence, to their own choir.
Healths systems research and the political economy of health taxes
Health is often seen as an impenetrable policy area. Medical and public health research is filled with technical jargon, circulates in specialised journals, and is consumed mainly by equally specialised professionals. Still, health systems research can serve as a bridge to other disciplines—and vice versa.
A health tax is typically an excise tax levied on the consumption of harmful products such as tobacco, alcohol, and sugar-sweetened beverages (SSBs). Its primary objective, from a public health perspective, is to improve health outcomes by curbing consumption of these goods. Health taxes are widely viewed as a cost-effective intervention, deemed a “best buy” by the WHO, for addressing the growing burden of non-communicable diseases (NCDs). By increasing prices, such taxes reduce affordability and, in turn, consumption.
In addition to their health benefits, these taxes generate public revenue that can be reinvested in health systems or preventive public health initiatives. The term “health taxes” is increasingly preferred over “sin taxes”, and how these measures are framed, whether highlighting health benefits, revenue potential, or economic trade-offs, is central to the policy debate.
To test this framing, I uploaded 12 studies on the political economy of health taxes published by the Alliance for Health Systems Research into NotebookLM. I reviewed the sources (listed below) and explored the factors that influence the implementation of such taxes, particularly in low- and middle-income countries. The research covered eight countries, including Indonesia, Peru, Nepal, and Ghana, and analysed the political and socioeconomic dynamics surrounding the design and adoption of health taxes, focusing on the interaction of actors and the arguments they employed.
This is intended to be a rapid review of these factors. A deeper analysis would probably unearth other “thornier issues” explaining the results of these processes: from corruption to state capture.
Here are the key influencing factors identified with the help of NotebookLM and refined by me:
- Structural factors – social and cultural context: In Indonesia, high levels of tobacco and alcohol consumption are strongly influenced by cultural norms. For example, tobacco is considered a traditional item in Lampung, used in wedding ceremonies, while alcohol features prominently in Balinese celebrations and rituals.
- Structural factors – institutional arrangements: In Peru, robust institutions, particularly the MoEF, were pivotal in implementing health taxes. In Indonesia, attention is centred on provincial governments, which play a crucial role in relaying national policy and controlling district budgets. Key actors include governors, regional legislative councils, and planning and finance agencies.
- Agency factors – stakeholders: In Peru, health tax advocates included the MoEF and civil society organisations, while opponents comprised trade associations and industries related to alcohol, SSBs, and tobacco. In Nepal, stakeholders were grouped to reflect their perspectives: government officials at various levels, producers and distributors, and civil society actors. In Ethiopia, the legislative debate was framed by two camps—the public health camp, led by the national food and drug authority, and the industry camp, consisting of private sector and trade associations. In Indonesia, focus groups brought together government, civil society, and consumers.
- Agency factors – power and relationships: In Peru, industry opponents demonstrated sophisticated communication strategies and access to influential policymakers, yet they failed to block reforms thanks to the MoEF’s institutional strength. In Mexico, the study highlighted interconnections between actors through revolving doors, advisory boards, funding links, and collaborative policy roles.
- Framing and arguments: In Peru, the way arguments were framed proved decisive. Opponents stressed economic disruption, trade risks, and social inequity, while supporters cited public health, government revenue, and cost savings. A wider review noted that anti-tax narratives often claimed such policies harmed the poor, the economy, and jobs. In Ethiopia, the public health coalition employed moral framing strategies to reach beyond their immediate allies.
- Evidence and research: While credible, context-specific evidence is essential, it is not sufficient on its own. In Ethiopia, public health advocates strengthened their position by backing arguments with research. In Ghana, a suite of studies, ranging from legal and political analyses to systematic reviews, was used to inform food and health-related taxation.
- Media: The media is a critical but sometimes undervalued player. Opponents often deploy sophisticated media strategies. In Peru, media content was analysed to understand framing strategies, while in Indonesia, media coverage was a major data source. Tobacco tax debates received far more attention than those involving alcohol or SSBs.
- Coalitions: Coalitions can unite diverse arguments and actors. In Ethiopia and Bangladesh, strong alliances framed tobacco taxation as a moral imperative. However, expanding these coalitions beyond the health sector remains a challenge.
A closer look at Peru
These dynamics are clearly visible in Peru. I delved more deeply into health taxes policy processes there, as it is one context I know particularly well. The study by Zuleta, Perez- Leon and Mialon examined two key reforms:
- 2016: The MoEF raised cigarette taxes by 157%, the largest increase in the country’s history. The main focus was tobacco.
- 2018: Taxes were raised again and expanded:
- Alcoholic drinks over 20% alcohol rose from 25% to 40%.
- Cigarette taxes were raised by another 50%.
- SSBs were taxed for the first time based on sugar content: 25% for drinks with more than 6g/100ml; 17% for others.
This period also saw the adoption of new regulations requiring greater transparency in food labelling.
Several factors explain these reforms:
- The dominant role of the MoEF: The MoEF was the lead actor (Peru’s President, at the time, an economist, also supported the new taxes). In Peru, only the MoEF can amend tax rates, bypassing Congress (which was against the reforms), and thereby limiting legislative interference. Informants pointed to the ministry’s autonomy, continuity, and institutional robustness as key enabling conditions. Technocrats at the MoEF were able to blend economic and public health arguments, and their longevity in office, despite political instability, strengthened policy continuity. The MoEF’s support was widely regarded as decisive. MoEF officials were recognised as opinion leaders, often focusing on revenue but increasingly open to health framing. Worryingly, since 2021, efforts to shift this power away from the MoEF have begun to erode its autonomy.
- The marginal role of the Ministry of Health (MoH): The MoH was largely sidelined. Its role was confined to providing health data, and it was seen as fragmented, understaffed, and lacking strategic continuity. Researchers and the media noted its limited capacity to lead or shape long-term policy.
- Political context and timing: The reforms in 2016 and 2018 coincided with periods of political transition. The first came at the start of President Kuczynski’s term, the second at the end, following Kuczynski’s resignation. These transitional periods offered opportunities for technocratic action before new political alignments could solidify. However, political contestation, especially from political actors not involved in the decisions, remains a key threat to sustainable reform.
- Framing strategies: Advocates, including the MoEF and civil society, combined economic and health narratives to build legitimacy and public support. Emphasising revenue generation, particularly as a solution to health financing challenges, was central. Advocates also drew on international examples from organisations such as the WHO, World Bank, PAHO, and the IMF, as well as peer countries like Chile and Mexico, both members of the Pacific Alliance, of which Peru is also a member. Chile, in particular, was seen as a credible comparator by Peruvian policymakers and media.
- Civil society engagement: Civil society, academic actors, and think tanks played an important supportive role. They contributed evidence and advocacy, helping to build the broader coalitions necessary for reform. Engagement beyond the health sector was critical. Also critical was the technocratic narrative the government had developed and used to claim legitimacy: this opened the door to sectoral experts.
- Industry opposition: Industry groups opposed the reforms using their own economic arguments: concerns about prices, jobs, competition, and enforcement. These claims often lacked empirical support, but were delivered with considerable media sophistication and political access. Nevertheless, in both 2016 and 2018, their efforts were outweighed by institutional resolve, particularly that of the MoEF, and the use of equality effective economic counter-arguments.
Why was this possible in Peru?
It is difficult to know why exactly, but I would like to suggest some hypotheses:
- The Peruvian political system’s weaknesses played to the advantage of the health tax reforms. With weak political parties and civil service capacity, experts in civil society, academia and the private sector were in high demand to fill key technical and political roles.
- The government of Pedro Pablo Kuczynski came into power largely supported by a technocratic narrative. Where his party lacked political credentials, it overcompensated for technical ones. This worked to its advantage on an issue that did not require the approval of the National Congress, where the government lacked a working majority.
- The technocrats President Kuczynski brought into his government were well connected to international academic and practitioner networks and, therefore, open to international evidence and trends.
- They were also primarily economists and were more comfortable with economic rather than social arguments.
- These arguments had been developing over the previous decade as a liberal consensus emerged among Peru’s technocratic elite (conservative in economic policy and progressive on social policy), and the evidence-informed policymaking narrative took hold.
It’s the economy, stupid—just not in the way you think
The Peruvian experience, mirrored in other low- and middle-income contexts, demonstrates that the success of public health reforms hinges not merely on the strength of the health evidence or the clarity of the health rationale, but on strategic engagement with the real centres of policymaking power.
When public health policy intersects with fiscal measures, as health taxes do, the Ministry of Economy and Finance, not the Ministry of Health, often becomes the key decision-maker. Progress depends on translating health evidence into economic and political language, navigating institutional realities, and engaging the actors who hold the pen.
Sectorial-focused (be that health or education or climate change) advocates must think beyond their echo chambers. They must ask not only what the evidence says, but who needs to hear it; and how it should be said. Inserting their sectorial interests into economists research agendas ought to be a priority.
Because ultimately, it is not just sectorial experts who shape policy, but, crucially, economists, budget officials, and political decision-makers who determine whether change happens; and whether it lasts.
The studies consulted for this article are as follows. +