Health Aid and Human Well-being: Exploring the Role of Donor Support in Developing Countries (Evidence from Fifty Developing Countries’ Dynamic Panel Data Analysis)

Abstract

This study aims to assess the impact of disbursed health aid on key health sector variables in 50 developing countries over 19 years (2002-2020). The variables analyzed include infant mortality rate (IMR), under-5 infant mortality rate (IMRu5), and life expectancy at birth (LifeExp). The study utilizes panel data and employs the Generalized Method of Moments (one-step and two-step GMM) for analysis. The findings reveal that health aid has a significant effect in reducing both IMR and IMRu5. A one percent increase in health aid corresponds to approximately 2.189 and 2.134 fewer infant deaths per 1000 live births and 3.497 and 2.864 fewer under-5 infant deaths per 1000 live births under one-step and two-step GMM, respectively. Additionally, a positive and statistically significant relationship exists between health aid and LifeExp. A one percent increase in health aid is associated with an increase of 0.064 and 0.076 years in LifeExp. The study also examines the impact of health aid on gender-specific health indicators. Health aid reduces both male and female IMR and IMRu5, with a more pronounced impact on male rates. Moreover, health aid has a more significant effect on improving female life expectancy than males. Furthermore, the study compares the effectiveness of multilateral and bilateral health aid. Both types of aid significantly reduce IMR and IMRu5, with bilateral aid being more effective for IMR and multilateral aid for IMRu5. Additionally, multilateral aid has a more substantial impact on enhancing life expectancy in developing countries. The main contribution of this study lies in its comprehensive analysis of the overall impact of health aid and its effects based on gender and donor characteristics. These findings emphasize the importance of Sustainable Development Goal 3 in promoting good health and well-being.