Effectiveness Of Foreign Aid To Health: Case Of Developing Countries

This paper considers effectiveness of health targeted aid and the role of corruption level in performance of health care system. The quality of the health care is measured by avoidable mortality, which refers to all deaths that can be prevented or cured given available knowledge and technology in health care. The sample contains data on 34 developing countries covering the period of 1995- 2009. Fixed effect methodology is applied to estimate whether total aid and bilateral and multilateral aid separately has effect on avoidable mortality. Results show that health targeted aid does have positive effect on avoidable mortality elimination. Moreover, countries with high corruption level tend to distribute aid more effectively than those with low corruption level. Finally, it is bilateral aid that seems to influence avoidable mortality level.