Grace Lordan, Kam Ki Tang & Fabrizio Carmignani, School of Economics Discussion Paper No. 422, February 2010, School of Economics, The University of Queensland. Australia.


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In recent times there has been a sense that HIV/AIDS control has been attracting a significantly larger portion of donor health funding to the extent that it crowds out funding for other health concerns. Although there is no doubt that HIV/AIDS control attracts a larger proportion of development assistance for health (DAH) and that HIV/AIDS should be a DAH priority, whether HIV/AIDS is actually diverting funding away from other health concerns has yet to be analyzed fully. To fill this vacuum, this study aims to test if a higher level of HIV/AIDS funding is related to a displacement in funding for other health concerns, and if yes, to quantify the magnitude of the displacement effect. Specifically, we consider whether HIV/AIDS DAH has displaced i) TB, ii) malaria iii) health sector and ‘other’ DAH in terms of the dollar amount received for aid. We consider this question within a regression framework controlling for time and recipient heterogeneity. We find displacement effects for malaria and health sector but not TB. In particular, the displacement effect for malaria is large and worrying.