Abstract

The study examines the triangular relationship between adult mortality, per capita income and foreign aid. Data are taken from the ‘Institute for Health Metrics and Evaluation’. We have included 37 low-income (LIC), 39 lower middle-income (LMIC), and 20 upper middle income (UMIC) for the period 1990-2008. The study starts from the idea that the statistical relationship between series of foreign aid and population health may be bidirectional, adding a new stage of complexity for testing the impact of a third variable: GDP, which could also predetermine the levels of aid granted. The Granger causality test is the most effective and practical way to determine the direction of the causalities. Although less effective for particular groups of countries (UMIC), foreign aid generally has a negative impact on mortality, as reported by tests taking into account directional causalities (70% of valid coefficients are negative). This result moderates the pessimistic view of international development aid, at least in the domain of assistance for health.

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