Seeds of hope: Assessing the effect of development aid on the reduction of child mortality", Working Papers # 591

The Millennium Declaration (2000) set as one of its targets a sub-stantial reduction in child mortality. This paper studies whether the massive increase in development aid can account for part of the re-duction in child mortality observed in developing countries since the year 2000. To do so, we analyze a panel of more than 130 developing countries over the 2000-2008 period. We use the time trend evolu-tion of aid to identify an exogenous source of variation. Total aid has had no statistically significant effect on child mortality. However, a disaggregate analysis identifies certain sectors of aid that have had a significant impact. The effects have been larger in high mortality countries, including Sub-Saharan Africa. Projections based on our es-timates strongly support the concern that most countries in that region will miss the Millennium Goals target on child mortality