The Fungibility of Aid Earmarked for HIV/AIDS Control Programs

Abstract

This paper investigates fungibility of Official Development Assistance (ODA) for HIV/AIDS control, adding to the debate regarding consequences of scaling up this type of ODA. A theoretical model yields two estimable equations; in public health spending and non-health spending, with ODA for HIV/AIDS as the key regressor. The equations are estimated using data for 52 countries, from 2003 to 2009. Results suggest ODA for HIV/AIDS is not fungible across the 52 countries. Fungibility and other constraints to effective use of increased ODA in health sectors are country-specific issues; ODA for HIV/AIDS must be delivered via mechanisms specific to country contexts.