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The fungibility of health aid reconsidered

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  • Nicolas Van de Sijpe

Abstract

This paper draws further attention to the importance of taking into account off-budget aid when estimating the degree of foreign aid fungibility. It does so by re-evaluating the results of a recent, influential paper which concluded that health aid is fully fungible in the long run. Allowing for the presence of off-budget aid indicates that the degree of fungibility of health aid is much more uncertain than at first blush appears. Under plausible assumptions about the role of off-budget aid, the conclusion of full fungibility is overturned and at most only a limited degree of fungibility is found.

Suggested Citation

  • Nicolas Van de Sijpe, 2013. "The fungibility of health aid reconsidered," CSAE Working Paper Series 2013-10, Centre for the Study of African Economies, University of Oxford.
  • Handle: RePEc:csa:wpaper:2013-10
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    File URL: http://www.csae.ox.ac.uk/materials/papers/csae-wps-2013-10.pdf
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    References listed on IDEAS

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    1. Nicolas Van de Sijpe, 2013. "Is Foreign Aid Fungible? Evidence from the Education and Health Sectors," World Bank Economic Review, World Bank Group, vol. 27(2), pages 320-356.
    2. repec:ags:stataj:117540 is not listed on IDEAS
    3. Bruno, Giovanni S. F., 2005. "Estimation and inference in dynamic unbalanced panel-data models with a small number of individuals," Stata Journal, StataCorp LP, vol. 0(Number 4), pages 1-28.
    4. Mark McGillivray & Oliver Morrissey, 2000. "Aid fungibility in Assessing Aid: red herring or true concern?," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 413-428, April.
    5. Bazoumana Ouattara, 2006. "Aid, debt and fiscal policies in Senegal," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(8), pages 1105-1122.
    6. Heller, Peter S, 1975. "A Model of Public Fiscal Behavior in Developing Countries: Aid, Investment, and Taxation," American Economic Review, American Economic Association, vol. 65(3), pages 429-445, June.
    7. Feeny, Simon, 2007. "Foreign Aid and Fiscal Governance in Melanesia," World Development, Elsevier, vol. 35(3), pages 439-453, March.
    8. Kiviet, Jan F., 1995. "On bias, inconsistency, and efficiency of various estimators in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 68(1), pages 53-78, July.
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    Cited by:

    1. repec:eee:jhecon:v:58:y:2018:i:c:p:67-75 is not listed on IDEAS
    2. Morrissey, Oliver, 2015. "Aid and Government Fiscal Behavior: Assessing Recent Evidence," World Development, Elsevier, vol. 69(C), pages 98-105.
    3. Łukasz Marć, 2017. "The Impact of Aid on Total Government Expenditures: New Evidence on Fungibility," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 627-663, August.
    4. Langlotz, Sarah & Potrafke, Niklas, 2016. "Does development aid increase military expenditure?," Working Papers 0618, University of Heidelberg, Department of Economics.

    More about this item

    Keywords

    foreign health aid; fungibility; public health expenditure;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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