Development assistance for health: Trend and effects on health outcomes in Ethiopia and Sub-Saharan Africa
Creators: name: Gutema, Keneni
Publisher: name: National Academic Digital Repository of Ethiopia
Year: 2016

description: Background: For decades, health targeted aid in the form of development assistance for health has been an important source of financing health sectors in developing countries. Health sectors in Sub Saharan countries in general and Ethiopia in particular, are even more heavily reliant upon donors. Consequently, a more audible donors support to health sectors was seen during the last four decades, consistent with the donor's response to the global goal of Alma-Ata declaration of "health for all by the year 2000" through primary health care in 1978. Ever since, a massive surge of development assistance for health has followed the out gone of the 2015 United Nations Millennium Declaration Goals in which three out of the eight goals were directly related to health. In spite of the long history of health targeted aid, with an ever increasing volumes, there is an increasing controversy on the extent to which health targeted aid is producing the intended health outcomes in the recipient countries. Despite the vast empirical literatures considering the effect of foreign development aid on economic growth of the recipient countries, systematic evidence that health sector targeted aid improves health outcomes is relatively scarce. The main contribution of this study is, therefore, to present a comprehensive country level, and cross-country evidences on the effect of development assistance for health on health outcomes. Objectives: The overall objective of this study was to analyze the effect of development assistance for health on health outcomes in Ethiopia, and in Sub Saharan Africa. Methods: For the Ethiopian (country level) study, a dynamic time series data analytic approach was employed. A retrospective sample of 36-year observations from 1978 to 2013 was analyzed using an econometric technique - vector error correction model. Beside including time dependency between the variables of interest and allowing for stochastic trends, the model provides valuable information on the existence of long-run and short-run relationships among the variables under study. Furthermore, to estimate the co-integrating relations and the other parameters in the model, the standard procedure of Johansen's approach was used. While development assistance for health expenditure was used as an explanatory variable of interest, life expectancy at birth was used as a dependent variable for the fact that it has long been used with or without mortality measures as health status indicators in the literatures.In the Sub Saharan Africa (cross-country level) study, a dynamic panel data analytic approach was employed using fixed effect, random effect, and the first difference-generalized method of moments estimators in the period confined to the year 1995-2013 over the cross section of 43 SSA countries. While development assistance for health expenditure was used as an explanatory variable of interest here again, infant mortality rate was used for health status measure done for its advantage over other mortality measures in cross-country studies. Results: In Ethiopia, the immediate one and two prior year of development assistance for health was shown to have a significant positive effect on life expectancy at birth. Other things being equal, an increase of development assistance for health expenditure per capita by 1% leads to an improvement in life expectancy at birth by about 0.026 years (P=0.000) in the immediate year following the period, and 0.008 years following the immediate prior two years period (P= 0.025). Similarly, in Sub-Saharan Africa, development assistance for health was found to have a strong negative effect on the reduction of infant mortality rate. The estimates of the study result indicated that during the covered period of study, in the region, a 1% increase in development assistance for health expenditure, which is far less than 10 cents per capita at the mean level, saves the life of two infants per 1000 live births (P=0.000). Conclusion: Contrary to the views of health aid skeptics, this study indicates strong favorable effect of development assistance for health sector in improving health status of people in Sub Saharan Africa in general and the Ethiopia in particular. Recommendations: The policy implication of the current findings is that development assistance for health sector should continue as an interim necessity means. However, domestic health financing system should also be sought, as the targeted countries cannot rely upon external resources continuously for improving the health status of the population. At the same time, the current development assistance stakeholders assumption of targeting facility based primary health care provision should be augmented by a more strong parallel strategy of improving socioeconomic status of the population that promotes sustainable improvement of health status in the targeted countries.