Determinants of Donor Funding for Reproductive Health Activities

Money, or the lack of it, is likely to be the deciding factor in meeting global health targets. Using panel data for 22 OECD/DAC countries over the period 1996-2007, this paper analyzes the determinants of donor funding for reproductive health activities. Much of the previous research on this subject found a strong positive correlation between donor funding and GDP of donor countries. I use disaggregated data on donor funding to account for the fact that relative importance of aid determinants is likely to vary across specific funding categories. The results strongly support the notion that it is important to differentiate between restricted (earmarked) and unrestricted (non-earmarked) funding. There is undoubtedly some discretion over both types of funding. Nevertheless, unrestricted funding seems to be more responsive to economic developments in donor countries as demonstrated by the strong positive correlation of this type of funding with GDP. Unrestricted funds are thus easier to increase or cut according to discretionary criteria. Restricted funding, on the other hand, can be viewed as more undeliberate or non-discretionary. This finding has an interesting implication with regard to items in donor aid budgets that could be particularly affected in times of economic crisis.