LAUSR

This paper utilizes causal time-series and panel techniques to examine the relationship between development assistance for health (DAH) and domestic health spending, both public and private, in 134 countries between 2000 and 2015. Data on 237 656 donor transactions from the Institute for Health Metrics and Evaluation's DAH and Health Expenditure datasets are merged with economic, demographic and health data from the World Bank Databank and World Health Organization's Global Health Observatory. Arellano-Bond system GMM estimation is used to assess the effect of changes in DAH on domestic health spending and health outcomes. Analyses are conducted for the entire health sector and separately for HIV, TB and malaria financing. Results show that DAH had no significant impact on overall domestic public health investment. For HIV-specific investments, a $1 increase in on-budget DAH was associated with a $0.12 increase in government spending for HIV. For the private sector, $1 in DAH is associated with a $0.60 and $0.03 increase in prepaid private spending overall and for malaria, with no significant impact on HIV spending. Results demonstrate that a 1% increase in public financing reduced under-5 mortality by 0.025%, while a 1% increase in DAH had no significant effect on reducing under-5 mortality. The relationships between DAH and public health financing suggest that malaria and HIV-specific crowding-in effects are offset by crowding-out effects in other unobserved health sectors. The results also suggest policies that crowd-in public financing will likely have larger impacts on health outcomes than DAH investments that do not crowd-in public spending.