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General Budget Support: Has It Benefited The Health Sector?

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  • Adelio Fernandes Antunes
  • Ke Xu
  • Chris D. James
  • Priyanka Saksena
  • Nathalie Van de Maele
  • Guy Carrin
  • David B. Evans

Abstract

There has been recent controversy about whether aid directed specifically to health has caused recipient governments to reallocate their own funds to non‐health areas. At the same time, general budget support (GBS) has been increasing. GBS allows governments to set their own priorities, but little is known about how these additional resources are subsequently used. This paper uses cross‐country panel data to assess the impact of GBS programmes on health spending in low‐income and middle‐income countries, using dynamic panel techniques to estimate unbiased coefficients in the presence of serial correlation. We found no clear evidence that GBS had any impact, positive or negative, on government health spending derived from domestic sources. GBS also had no observed impact on total government health spending from all sources (external as well as domestic). In contrast, health‐specific aid was associated with a decline in health expenditures from domestic sources, but there was not a full substitution effect. That is, despite this observed fungibility, health‐specific aid still increases total government health spending from all sources. Finally, increases in total government expenditure led to substantial increases in domestic government health expenditures. Copyright © 2012 John Wiley & Sons, Ltd.

Suggested Citation

  • Adelio Fernandes Antunes & Ke Xu & Chris D. James & Priyanka Saksena & Nathalie Van de Maele & Guy Carrin & David B. Evans, 2013. "General Budget Support: Has It Benefited The Health Sector?," Health Economics, John Wiley & Sons, Ltd., vol. 22(12), pages 1440-1451, December.
  • Handle: RePEc:wly:hlthec:v:22:y:2013:i:12:p:1440-1451
    DOI: 10.1002/hec.2895
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    References listed on IDEAS

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    2. Stefan Koeberle & Zoran Stavreski & Jan Walliser, 2006. "Budget Support as More Effective Aid? Recent Experiences and Emerging Lessons," World Bank Publications - Books, The World Bank Group, number 6958, December.
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    4. Feyzioglu, Tarhan & Swaroop, Vinaya & Zhu, Min, 1998. "A Panel Data Analysis of the Fungibility of Foreign Aid," The World Bank Economic Review, World Bank, vol. 12(1), pages 29-58, January.
    5. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    6. Paul Collier & David Dollar, 2004. "Development effectiveness: what have we learnt?," Economic Journal, Royal Economic Society, vol. 114(496), pages 244-271, June.
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    Cited by:

    1. Rohan Sweeney & Duncan Mortimer, 2016. "Has the Swap Influenced Aid Flows in the Health Sector?," Health Economics, John Wiley & Sons, Ltd., vol. 25(5), pages 559-577, May.
    2. Kaisa Alavuotunki, 2015. "General budget support, health expenditures, and neonatal mortality rate," WIDER Working Paper Series 108, World Institute for Development Economic Research (UNU-WIDER).
    3. Tim Röthel, 2023. "Budget support to the health sector—The right choice for strong institutions? Evidence from panel data," Review of Development Economics, Wiley Blackwell, vol. 27(2), pages 735-770, May.
    4. Kaisa Alavuotunki, 2015. "General budget support, health expenditures, and neonatal mortality rate: A synthetic control approach," WIDER Working Paper Series wp-2015-108, World Institute for Development Economic Research (UNU-WIDER).

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