title: Does funding from donors displace government spending for health in developing countries?
abstract: The notable increases in funding from various donors for health over the past several years have made examining the effectiveness of aid all the more important. We examine the extent to which donor funding for health substitutes for--rather than complements--health financing by recipient governments. We find evidence of a strong substitution effect. The proportionate decrease in government spending associated with an increase in donor funding is largest in low-income countries. The results suggest that aid needs to be structured in a way that better aligns donors' and recipient governments' incentives, using innovative approaches such as performance-based aid financing.
authors: Schneider Institutes for Health Policy, Heller School for Social Policy and Management, Brandeis University, Waltham, Massachusetts, USA. marwa@brandeis.edu
authors: Marwa
authors: M
authors: Farag
authors: A K
authors: AK
authors: Nandakumar
authors: Stanley S
authors: SS
authors: Wallack
authors: Gary
authors: G
authors: Gaumer
authors: Dominic
authors: D
authors: Hodgkin
mesh_terms: D003906:Developing Countries; D005380:Financing, Government; D005102:Health Expenditures; D007391:International Cooperation; D017059:Models, Econometric