Does Health-Related Aid Really Matter? Evidence from South Asia

Dr Salma Ahmed1, Dr Debajyoti  Chakrabarty2, Dr Kishor Sharma3

1Deakin University, Melbourne, Australia, 2Charles Darwin University, Sydney, Australia, 3Australian Technical and Management College, Melbourne, Australia

Empirical literature examining the effectiveness of health-related aid on health outcomes is surprisingly scarce and has not found robust evidence in favour of health aid. This paper contributes to this debate, using the experience of South Asian countries over the period 2002-2016. The investigation of South Asia is particularly interesting not only because it has attracted significant aid over the years, but also because of the significant variations in health outcomes between countries in the region. This paper is the first to empirically test the hypothesis that increases in health aid improve child health outcomes in South Asia. The effectiveness of sector-specific aid is examined on a mortality index: an equally weighted average of infant mortality, neonatal mortality and child mortality. This new mortality outcome measure is unique, and it allows us to capture the effect of health aid on all three types of child mortality at the same time. Applying the instrumental variables method to account for the endogeneity of aid, this article demonstrates that increased health aid significantly improves child health outcomes. It implies that achieving the MDG target through additional health aid alone can be important for countries swamped with poor health outcomes.


Salma Ahmed, the associate research fellow at ADI, is a development economist whose work focuses on gender inequality, child labour, education, health and fertility in developing countries, particularly in Bangladesh and India and more recently on other states of South Asian region.

Her recent research has focused on two central areas: (i) Expansions in paid maternity leave coverage: Implications for fertility, female labour force participation and child mortality in South Asia, and (ii) The geographical distribution of Australian foreign aid.

She completed her PhD at the Department of Economics at Monash University in 2013 and also completed MPhil at the Department of Economics at Monash University in 2008. She has previously worked at ADI as a post-doctoral research fellow on International Development.


The Asian Studies Association of Australia (ASAA) is the peak body of university experts and educators on Asia in Australia. Established in 1976, we promote and support the study of Asia in Australian universities and knowledge of Asia among the broader community. Our membership is drawn mainly from academics and students, but also includes industry and government Asia experts. We take a strong interest in promoting knowledge about Asia in schools and in contributing to state and Commonwealth government policies related to Asia. We provide informed comment on Asia to a broad public through our bulletin, Asian Currents, and specialist research articles in our journal, Asian Studies Review. Four book series published under our auspices cover Southeast Asia, South Asia, East Asia and Women in Asia.

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