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Rethinking aid for AIDS A public good approach

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  • Sonntag, Diana

Abstract

This paper demonstrates why an increased quantity of funding as claimed by big health lenders is not effective to achieve the Millennium Development Goals (MDGs). An alternative funding mechanism linking the disbursement of matching grants with a minimum provision level is suggested. In order to study the impact of conditional subsidies on the efficiency of international health-promoting public goods, non-cooperative multi-stage games are analyzed. In the participation stage, a subsidy which is contingent on some minimum provision level is determined. In later stages countries choose their contributions to a health-promoting public good and receive a subsidy if their supply is no less than a predetermined threshold. The analyses indicate that efficient provision levels can be achieved.

Suggested Citation

  • Sonntag, Diana, 2012. "Rethinking aid for AIDS A public good approach," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62080, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc12:62080
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    References listed on IDEAS

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    1. Todd Sandler & Daniel G Arce M, 2002. "A conceptual framework for understanding global and transnational public goods for health," Fiscal Studies, Institute for Fiscal Studies, vol. 23(2), pages 195-222, June.
    2. Öhler, Hannes & Nunnenkamp, Peter & Dreher, Axel, 2012. "Does conditionality work? A test for an innovative US aid scheme," European Economic Review, Elsevier, vol. 56(1), pages 138-153.
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    5. Rainer Thiele & Peter Nunnenkamp & Axel Dreher, 2007. "Do Donors Target Aid in Line with the Millennium Development Goals? A Sector Perspective of Aid Allocation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 596-630, December.
    6. Todd Sandler, 1998. "Global and regional public goods: a prognosis for collective action," Fiscal Studies, Institute for Fiscal Studies, vol. 19(3), pages 221-247, August.
    7. Diana Sonntag, 2010. "AIDS and Aid," Contributions to Economics, Springer, number 978-3-7908-2419-3, October.
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    More about this item

    JEL classification:

    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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