Does Norwegian Aid Reward Equitable Access to Health in Recipient States? Assessing a ‘Moral Superpower’s’ Aid to Pro-Poor Development, 1990–2019

Abstract

We assess if Norwegian aid policies, widely heralded for being morally driven, rewards pro-poor governance. If higher levels of equitable access to health attracts higher levels of Norwegian aid, one might argue that Norwegian aid prioritizes the poor, which is both morally good and instrumentally valuable. We find that total Norwegian aid and aid for health and social development are economically less valuable to recipients with greater equity of access to health. Yet, one may argue that this result is due to Norway picking the hard cases, those resistant to change. Our results show, however, that Norwegian aid increases to places that have become more equitable over time while simultaneously remaining lower to currently equitable locations. Whether Norway is ‘chasing success’ or actually ‘rewarding reform’ is hard to untangle although, in our opinion, a sound donor strategy should be one that targets currently favorable policy, signaling to laggards that change is rewarded. Granger causality tests for assessing the likelihood of reverse causality suggest that higher levels of equity are more likely to ‘Granger cause’ aid (negatively) than the other way around, suggesting that aid flows are unlikely to be causing equity in the short run. If in fact a country such as Norway fails the poor, at least on this important dimension of equity, then it is hardly reasonable to expect differently from others. The results taken together support critics who suggest that aid often bypasses the poor.