Health aid and governance in developing countries

Despite anecdotal evidence that the quality of governance in recipient countries affects the allocation of international health aid, there is no quantitative evidence on the magnitude of this effect, or on which dimensions of governance influence donor decisions. We measure health-aid flows over 1995-2006 for 109 aid recipients, matching aid data with measures of different dimensions of governance and a range of country-specific economic and health characteristics. Everything else being equal, countries with more political rights receive significantly more aid, but so do countries with higher corruption levels. The dependence of aid on political rights, even when we control for other governance indicators, suggests that health aid is sometimes used as an incentive to reward political reforms.