| Summary: | Keneni Gutema Negeri,1 Damen Halemariam,21School of Public and Environmental Health, Health Service Management Unit, College of Medicine and Health Sciences, Hawassa University, Hawassa, 2College of Medicine and Health Sciences, School of Public Health, Addis Ababa University, Addis Ababa, Ethiopia Introduction: Data on the effect of health aid on the health status in developing countries are inconclusive. Moreover, studies on this issue in sub-Saharan Africa are scarce. Therefore, this study aims to analyze the effect of health development aid in sub-Saharan Africa. Methods: Using panel data analytic method, as well as infant mortality rate as a proxy for health status, this study examines the effect of health aid on infant mortality rate in sub-Saharan Africa. The panel was constructed from data on 43 countries for the period 1990–2010. Fixed effect, random effect, and first difference generalized method of moments estimator were used for estimation. Results: Health development aid has a statistically significant positive effect. A 1% increase of health development assistance per capita saves the lives of two infants per 1,000 live births (P=0.000) in the region. Conclusion: Contrary to health aid pessimists’ view, this study observes the fact that health development assistance has strong favorable effect in improving health status in sub-Saharan Africa. Keywords: health aid, infant mortality, developing countries, panel data
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