Aid for health: should policy-makers worry about its macroeconomic impact?
Technical brief for policy-makers, Number 3/2007
Many developing countries need to substantially increase health expenditure if they want to significantly improve the population’s health. Financial assistance provided by multilateral or bilateral external partners is becoming a major source of revenue. However a large increase in this type of aid could theoretically lead to increased inflation, problems with the balance of payments and slower growth.
This policy brief examines the possible effects of aid flows on the wider economy and suggests that it is possible to minimize and even eliminate any possible adverse effects. In general, countries should not be concerned about accepting more aid for health.