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Aid Externalities: Evidence from PEPFAR in Africa

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  • Lee, Melissa M.
  • Izama, Melina Platas

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.

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  • Lee, Melissa M. & Izama, Melina Platas, 2015. "Aid Externalities: Evidence from PEPFAR in Africa," World Development, Elsevier, vol. 67(C), pages 281-294.
    • Handle: RePEc:eee:wdevel:v:67:y:2015:i:c:p:281-294
    DOI: 10.1016/j.worlddev.2014.10.001
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    2. Yiyeon Kim, 2021. "The geographic scope of conflict and HIV," International Journal of Health Planning and Management, Wiley Blackwell, vol. 36(6), pages 2313-2322, November.
    3. Ndikumana, Léonce & Pickbourn, Lynda, 2017. "The Impact of Foreign Aid Allocation on Access to Social Services in sub-Saharan Africa: The Case of Water and Sanitation," World Development, Elsevier, vol. 90(C), pages 104-114.
    4. Yiyeon Kim, 2019. "The effectiveness of PEPFAR's funding for women and children with HIV/AIDS," International Journal of Health Planning and Management, Wiley Blackwell, vol. 34(1), pages 896-916, January.

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