Background: Previous literature suggests that increasing numbers of development aid donors can reduce aid effectiveness but this has not been tested in the health sector, which has experienced substantial recent growth in aid volume and number of donors.
Methods: Based on annual data for 1995–2010 on 139 low- and middle-income countries that received health sector aid from donors reporting to the OECD’s Creditor Reporting System, the study used two-step system generalized method of moments regression models to test whether the number of health aid donors and an index of health aid donor fragmentation affect health services (measured by DTP3 immunization rate) or health outcomes (measured by infant mortality rate) for three subsectors of health aid.
Results: For total health aid and for the general and basic health aid subsector, controlling for economic and political conditions, increases in the number of donors were associated with increases in DTP3 immunization rate and reductions in infant mortality while increases in the donor fragmentation index were associated with decreases in DTP3 immunization rate and increases in infant mortality, though none of these relationships were statistically significant. For the population and reproductive health aid subsector, a one percent increase in the number of donors was associated with a 0.23 percent decrease in DTP3 immunization (P < 0.01) while a one percent increase in donor fragmentation was associated with a 0.54 percent increase in DTP3 immunization rate (P < 0.01); associations with infant mortality rates for this subsector were similar to those for total health aid.
Conclusion: The results do not provide clear evidence in support of the hypothesis that donor proliferation negatively impacts development results in the health sector. Aid effectiveness policy prescriptions should distinguish responses to donor proliferation versus donor fragmentation and be adapted to specific subsectors of health aid.