Impact of health aid in developing countries: The public vs. the private channels

Muhammad Asim Afridi and Bruno Ventelou

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Abstract: This paper examines the efficient allocation of international health aid. We built a simple macroeconomic model which considers an endogenous allocation of aid mixed between the public and the private channels. We derive a non-cooperative interaction-game involving the private sector, the donor and the recipient government. We compare the equilibrium of the game to the optimal level of health aid allocation, showing a gap between both. The empirical analysis is based on the Institute for Health Metrics and Evaluation (IHME) and World Health Organization (WHO) data sets using dynamic panel data model with fixed effects (system-GMM). Our results show that health aid actually reduces adult mortality in developing countries. Furthermore, we show that the actual allocation of aid-mix between government and private channels is not health efficient and there is room for reallocation.

Keywords: Foreign aid; International organizations; panel data; Policy coordination; Public health; Regulation (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

Published in Economic Modelling, 2013, 31 (C), pp.759-765. ⟨10.1016/j.econmod.2013.01.009⟩

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Journal Article: Impact of health aid in developing countries: The public vs. the private channels (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01498263

DOI: 10.1016/j.econmod.2013.01.009

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