Abstract

As the volume of health aid to developing countries increases and allocations shift toward specific disease burdens, issues of allocation efficiency become more important to the achievement of better health outcomes. This paper examines (1) whether health aid—traditional and innovative—corresponds to recipients’ needs and priorities and (2) how the terms of aid affect its efficiency. We find that there is considerable scope for improvement through consolidation, improvement of terms, and increased attention to the efficient allocation of the marginal dollar of aid, improvement through consolidation, improvement of terms, and increased attention to the efficient allocation of the marginal dollar of aid.