Development Finance in Transition: Donor Dependency and Concentration in Kenya’s Health Sector

Abstract

As more countries move from low- to middle-income status, they are perceived as increasingly capable of financing their own health systems. Some donors have begun to transition their support out of such middle-income countries (MICs) to redirect their funds to countries with greater needs. However, this transition may leave a funding gap for MICs that could be difficult to fill when external resources decline. If not carefully managed, such financial shifts could lead to the loss of health gains that occurred while receiving substantial external financial support. Understanding levels of donor dependency (i.e., whether or not a country is likely to have capacity to fill a funding gap caused by donor transition) and donor concentration (i.e., when only a few donors make up the majority of aid) can illuminate areas of potential vulnerability for transition. In this study, we analyzed Kenya’s health system for donor dependency and donor concentration.