Health aid, governance and infant mortality

Abstract We investigate the impact of health aid on infant mortality conditional on the quality of governance. Our analysis applies instrumental variable estimation with health aid instrumented by donor government fractionalization interacted with the probability of allocating health aid to a recipient country. Using panel data for 96 recipient countries for the 2002–2015 period, we find that the effectiveness of health aid in reducing infant mortality is conditional on good governance. The results are robust in a variety of ways. Our findings reaffirm the importance of improving the quality of governance in recipient countries.