Aid diversion and the impact of Development Assistance for Health in a decentralized health system

Samuel Lordemus

No 2018016, Working Papers from The University of Sheffield, Department of Economics

Abstract: The effects of foreign aid on a decentralised health system are analysed in a theoretical framework where the donor has imperfect information about the local health needs while the central and local governments do not engage in self-interested efforts upon receiving aid. I discuss the implications of conditionality of aid on local health expenditures, intergovernmental transfers and social welfare. I then examine these consequences in a health system with two levels of care when the donor restricts aid on Primary Health Care.

Keywords: Conditionality; Decentralisation; Fiscal transfer; Foreign aid; Fungibility (search for similar items in EconPapers)
JEL-codes: F35 H42 H75 I10 I15 I18 O19 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2018-10
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http://www.sheffield.ac.uk/economics/research/serps/articles/2018_016 First version, October 2018 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:shf:wpaper:2018016

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