Over the past two decades, the role of good governance in aid effectiveness has been a topic of debate. Both donor and recipient countries have questioned why investments of official development assistance (ODA) over many years have not resulted in stronger economic and health outcomes. This blog post focuses on health aid (in particular HIV/AIDS aid) and the impact control of corruption and democratic accountability may have on improving health outcomes.
More than 95% of HIV infections are in developing countries. As a result, global communities have invested billions of dollars in the fight against HIV/AIDS using funding from ODA and other substantial donors. Although AIDs-related deaths have decreased by 35% and HIV infections have decreased by 40% since 2000, the decrease has not been significant and millions of new HIV cases are still diagnosed each year. The World Bank’s 1998, “Assessing Aid,” report is part of a body of literature that proposes that good economic policies in recipient countries are associated with (and may be necessary for) successful outcomes like preventing disease and building stronger economies. Furthermore, control of corruption in government leadership can be a major factor for growth and poverty reduction, due to good fiscal and trade policies that seek to invest in growth-promoting activities.
According to findings stated in the Hwa-Young Lee et al. article titled, “Control of corruption, democratic accountability, and effectiveness of HIV/AIDS official development assistance,” control of corruption contributes to aid effectiveness in healthcare delivery. HIV/AIDS is a strong example of this since large amounts of funding are needed to control the illness due to the stigma associated with it, the price of drugs, and the breadth of the epidemic. Corruption at any level can weaken health outcomes by raising the price of services or weakening the quality of treatment . This can, in turn , discourage further investment from donors. Consequently, HIV/AIDS policies have to involve broad, democratic consensus about how to invest resources in a way that ensures improved health outcomes.
Hwa-Young Lee et al. used data from 2001-2010 to measure the role control of corruption and democratic accountability on improving HIV/AIDS outcomes. General Methods of Moments estimation showed that control of corruption and democratic accountability had independent effects on the amount of HIV/AIDS aid and the incidence of HIV/AIDS. Furthermore, democratic accountability had a negative interaction with the amount of HIV/AIDS aid on new cases of the disease. The results indicate that more funding may not lead to better outcomes in countries that do not have strong democratic accountability. The authors also propose that HIV/AIDS aid is effective because it focuses on preventing new cases. Although prevalence of HIV/AIDS was explored, an increase in prevalence can be attributed to better treatments and prolonged life. As a result, looking at the relationship between HIV/AIDS prevalence and corruption or democratic accountability may not paint an accurate picture of aid effectiveness.
The debate over the effectiveness of aid in developing countries will likely not be going away soon. Now more than ever, it is important for recipient countries to share their success stories and for donors to work with them to deliver effective economic and health outcomes. At the same time, donors should evaluate their roles in helping alleviate or exacerbate corruption and democratic accountability in developing countries.
According to the International Institute for Democracy and Electoral Assistance’s (IDEA’s) Democracy and Development programme, democratic accountability refers to: ways in which citizens, political parties, parliaments and other democratic actors can provide feedback to, reward or sanction officials in charge of setting and enacting public policy. Well functioning accountability mechanisms are believed to provide incentives for governments to work in the best interests of citizens…Read more in their discussion paper titled, “Democratic Accountability in Service Delivery: A Synthesis of Case Studies.”