Fungibility and the Impact of Development Assistance : Evidence from Vietnam's Health Sector

How can the impact of aid be estimated in the presence of fungibility? And how far does fungibility reduce its benefits? These questions are analyzed in a context where a donor wants to target its efforts on a specific sector and specific geographi...

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Bibliographic Details
Main Author:	Wagstaff, Adam
Format:	Policy Research Working Paper
Language:	English
Published:	Washington, DC: World Bank 2012
Subjects:	ACCOUNTING ACCURATE ESTIMATE AGED ALLOCATION AMOUNT OF MONEY BASELINE SCENARIO BENEFICIARIES BENEFICIARY BREAST CANCER BUDGET CONSTRAINT CALCULATION CENTRAL GOVERNMENT CHILD CARE CHILD HEALTH CHILD MORTALITY CHILD SURVIVAL CLINICS COMMUNES CONTRACEPTIVE SUPPLIES CREDITS DATA ANALYSIS DEVELOPMENT ASSISTANCE DEVELOPMENT BANK DISTRICTS DONOR ASSISTANCE DONOR FUNDS ECONOMIC GROWTH ESSENTIAL DRUGS EXPENDITURE ALLOCATIONS EXPENDITURE DATA EXPENDITURES FAMILY HEALTH FAMILY PLANNING FISCAL CAPACITY FISCAL DECENTRALIZATION FISCAL TRANSFERS FUNGIBILITY FUNGIBILITY OF AID GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REVENUES GOVERNMENT SPENDING HEALTH CENTERS HEALTH EXPENDITURE HEALTH EXPENDITURES HEALTH FACILITIES HEALTH FINANCING HEALTH INDICATORS HEALTH INSURANCE HEALTH MINISTRY HEALTH OUTCOMES HEALTH PLANNING HEALTH PROBLEMS HEALTH SECTOR HEALTH SECTOR REFORM HEALTH SPENDING HOSPITALS HOUSEHOLDS HOUSING HOUSING CENSUS HUMAN DEVELOPMENT INCOME INFANT INFANT DEATH INFANT DEATHS INFANT MORTALITY INFANT MORTALITY RATE INSTITUTIONAL CAPACITY INSURANCE SCHEME INTERVENTIONS LIVE BIRTHS LOAN MALARIA MARRIED WOMEN MONEY MATTER MORTALITY MOTHER NATIONAL GOVERNMENT NATIONAL PRIORITY NEWBORNS NUMBER OF CHILDREN OUTCOME INDICATOR PATIENTS PERFORMANCE ASSESSMENT POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLLUTION POPULATION DENSITY POVERTY REDUCTION PRIMARY HEALTH CARE PRODUCTIVITY PROGRAMS PROGRESS PROVINCIAL EXPENDITURE PROVINCIAL GOVERNMENT PROVINCIAL LEVEL PROVINCIAL REVENUES PUBLIC ECONOMICS PUBLIC EXPENDITURE PUBLIC EXPENDITURE REVIEW PUBLIC RESOURCES PUBLIC SERVICES PUBLIC SPENDING PURCHASES REPRODUCTIVE HEALTH RESPECT RISK OF DEATH RURAL AREAS SANITATION SAVINGS SERVICE DELIVERY SOCIAL HEALTH INSURANCE SOCIAL SCIENCE SOCIAL WELFARE SPENDING INCREASE SPILLOVER SPILLOVER EFFECTS TOTAL EXPENDITURES TOTAL SPENDING TRAINING PROGRAMS URBAN AREAS USER FEES WELFARE FUNCTION WORTH
Online Access:	http://documents.worldbank.org/curated/en/2008/12/10309754/fungibility-impact-development-assistance-evidence-vietnams-health-sector http://hdl.handle.net/10986/6328

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Summary:	How can the impact of aid be estimated in the presence of fungibility? And how far does fungibility reduce its benefits? These questions are analyzed in a context where a donor wants to target its efforts on a specific sector and specific geographic areas. A traditional differences-in-differences method comparing the change in outcomes between the target and nontarget areas before and after the project risks misestimating the project's benefits. The paper develops an alternative estimation method in which intersectoral fungibility reduces project benefits insofar as government spending has a smaller impact in the sector to which the funds leak than in the target sector, while intrasectoral fungibility reduces benefits insofar as the donor is able to leverage productivity increases in government spending in the target areas. The methods are applied to two contemporaneous World Bank health projects that set out to target assistance on approximately one-half of Vietnam's provinces. Aid is not apparently fungible between Vietnam's health sector and other sectors, but is fungible across provinces within the health sector. Differences-in-differences yield an insignificant impact on infant mortality, while the use of the new method yields a statistically significant impact of around 4 per 1000 live births. The results, however, are ambiguous on the costs associated with intrasectoral fungibility.

Fungibility and the Impact of Development Assistance : Evidence from Vietnam's Health Sector

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