Aid Externalities: Evidence from PEPFAR in Africa

Melissa M. Lee and Melina Platas Izama

World Development, 2015, vol. 67, issue C, 281-294

Abstract: Do targeted aid programs have unintended consequences outside of the target issue area? We investigate this question with an examination of one of the largest targeted aid programs in the world: the President’s Emergency Plan for AIDS Relief (PEPFAR). Critics of PEPFAR worry that a targeted program focusing on single diseases has a negative externality, in which the influx of massive amounts of target aid damages broader public health systems in countries that receive PEPFAR funds. Using a difference-in-differences identification strategy, we find statistical evidence that supports critics of targeted aid.

Keywords: foreign aid; health; state capacity; Africa; sub-Saharan Africa; externalities (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:67:y:2015:i:c:p:281-294

DOI: 10.1016/j.worlddev.2014.10.001

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