The Two decades after the appearance of the human [highly resistant and infectious] virus (HIV), an estimated 30 million people have contracted the virus, and 6 million have died of acquired immune deficiency syndrome (AIDS). About 90 percent of infections occur in developing countries, where the disease has already reduced life expectancy, in some cases by more than a decade. HIV is already widespread in many countries in Sub-Sahara Africa and may be on the verge of exploding in other regions. Because most people who develop AIDS are adults in the prime of life, the disease exacts a heavy toll on surviving family members, especially children, and may exacerbate poverty and inequality. Clearly, the human toll of the epidemic is great. But low- income countries face a multitude of pressing human needs. How should developing country governments and the international community respond?

...Although there are clear arguments in favor of government intervention to slow the spread of HIV, social norms and politics make AIDS policy uniquely challenging. This is especially true during the early stages of the epidemic, when the advantages of government intervention are greatest but the potential severity of the problem is not yet apparent. Governments have a mandate to endorse and subsidize risk- reducing preventive interventions, especially among those most likely to contract and spread HIV, while protecting them from stigmatization.

... Because AIDS strikes adults in their economic prime and, despite recent medical advances, is almost always fatal, the disease reduces average life expectancy (sometimes dramatically), increases the demand for medical care, and is likely to (increase) poverty and inequality. The relationship between economic development policies and HIV is complex ... [present information and evidence] indicate(s) that the AIDS epidemic is likely to both affect and be affected by economic development.

... Faced with competing demands for scarce public resources, and aware that HIV/AIDS is spread primarily through private sexual and drug- injecting behavior, governments may conclude that the disease is not a public priority...

Starting from the view that government has a mandate to advance economic well-being and to promote a fair distribution of society's output, government cannot leave the battle against HIV/AIDS to the private sector. First, in countries that wish to subsidize most of the cost of health care, AIDS will generate enormous government health care expenditures; this alone is sufficient justification for early, effective prevention. Second, when a sexual encounter between two people increases the risk of HIV infection to their other partners, public economics argues for government intervention. Third, the provision of information about the state of the epidemic or about the effectiveness of alternative remedies meets the economist's definition of a public good; that is, something that benefits society but that private entrepreneurs have insufficient incentive to produce on their own. Public economics argues that governments can often enhance the welfare of society by ensuring the adequate provision of such services. Fourth, fairness and compassion for the poor warrant a government role in both preventing and mitigating the epidemic. Finally, governments influence social norms and promulgate legislation that affect the rights of both the HIV-infected and the uninfected. Measures that protect the powerless from prejudice, bigotry, and exploitation will simultaneously help to protect everyone from the AIDS epidemic.