Does Official Development Assistance for health from developed countries displace government health expenditure in Sub-Saharan countries?

Karim Barkat (), Zouhair Mrabet () and Mouyad Alsamara
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Karim Barkat: Qatar University
Zouhair Mrabet: Qatar University

Economics Bulletin, 2016, vol. 36, issue 3, 1616-1635

Abstract: This paper empirically examines the foreign aid fungibility in the health sector of 45 Sub-Saharan countries over the period of 1995-2012. The aim of the study is to investigate the effect of foreign health aid on government health expenditure by using two methods: the Generalized Method of Moments (GMM) and the Fixed Effect Instrumental Variables (FE-IV). The estimation was conducted on the full sample and on two sub samples: middle- and low-income countries. We found strong evidence of partial fungibility in the health sector as follows: an increase of 1% in health aid leads to an increase of 0.04 to 0.1% of government health spending, noting that the magnitude of fungibility in middle-income countries is higher than in the low-income ones.

Keywords: Health; Public Health Expenditure; Foreign Aid; Fungibility (search for similar items in EconPapers)
JEL-codes: H0 H5 (search for similar items in EconPapers)
Date: 2016-08-24
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Citations: View citations in EconPapers (7)

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