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The Politics of Public Health Aid: Why Corrupt Governments Have Incentives to Implement Aid Effectively

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  • Dietrich, Simone
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    Abstract

    Summary Conventional wisdom suggests that foreign aid is more effective in less corrupt states. Recently, however, research is emerging that suggests that this argument may be too broad and that the effect of governance on aid effectiveness is masked by the study of aggregate aid flows. I focus on the public health sector and develop an argument of strategic compliance: corrupt recipient governments have incentives to comply with donor objectives but they will do so in aid sectors, in which compliance is cheap. I use two-step Generalized Method of Moments (GMM) as my primary estimation technique. I find strong and robust evidence for my argument.

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    Bibliographic Info

    Article provided by Elsevier in its journal World Development.

    Volume (Year): 39 (2011)
    Issue (Month): 1 (January)
    Pages: 55-63

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    Handle: RePEc:eee:wdevel:v:39:y:2011:i:1:p:55-63

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    Web page: http://www.elsevier.com/locate/worlddev

    Related research

    Keywords: foreign aid effectiveness health aid corruption immunization DTP3;

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    1. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," Boston College Working Papers in Economics 545, Boston College Department of Economics, revised 14 Feb 2003.
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    12. Michael Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting Chickens When They Hatch: The Short-term Effect of Aid on Growth," Working Papers 44, Center for Global Development.
    13. Gauri, Varun & Khaleghian, Peyvand, 2002. "Immunization in Developing Countries: Its Political and Organizational Determinants," World Development, Elsevier, vol. 30(12), pages 2109-2132, December.
    14. Stijn Claessens & Danny Cassimon & Bjorn Van Campenhout, 2009. "Evidence on Changes in Aid Allocation Criteria," World Bank Economic Review, World Bank Group, vol. 23(2), pages 185-208, June.
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