Abstract
BACKGROUND: The Global Fund to Fight AIDS, Tuberculosis and Malaria has proven highly effective at fighting the world's major killers. Strong governance and robust development institutions are necessary, however, for improving health long-term. While some suggest that international aid can strengthen institutions, others worry that aid funding will undermine governance, creating long-term harm. The Global Fund is a unique aid institution with mechanisms designed to improve transparency and accountability, but the effectiveness of this architecture is not clear. OBJECTIVES: This study seeks evidence on the effects of Fund financing over the past 15 years on national governance and development. METHODS: A unique dataset from 112 low- and middle-income countries was constructed with data from 2003 to 2017 on Global Fund financing and multiple measures of health, development, and governance. Building a set of regression models, we estimate the relationship between Fund financing and key indicators of good governance and development, controlling for multiple factors, including the effects of other aid programs and tests for reverse causality. FINDINGS: We find that Global Fund support is associated with improved control of corruption, government accountability, political freedoms, regulatory quality, and rule of law, though association with effective policy implementation is less clear. We also find associated benefit for overall adult mortality and human development. CONCLUSION: Our data are not consistent with recent claims that aid undermines governance. Instead our findings support the proposition that the Global Fund architecture is making it possible to address the continuing crises of AIDS, tuberculosis, and malaria in ways that improve institutions, fight corruption, and support development. Amidst the complex political economy that produces good governance at a national level, our finding of a beneficial effect of health aid suggests important lessons for aid in other settings.