How Does Corruption Disturb the Foreign Aid Effectiveness to Reduce Child Mortality Rate in Developing Economies?

Abstract

This study explores the foreign aid effects on health by using child mortality rate as health indicator. The results by applying Generalized Method of Moments (GMM) panel framework to a sample of 95 developing economies from 2000 to 2015 indicate a negative relationship between aid assistance and child mortality rate in developing economies. Corruption is found to have positive impact on child mortality rate and it is also observed that corruption leads to reduction in health improvements in developing economies and foreign aid ineffectiveness in health sector is observed in presence of corruption.