What goes wrong with the allocation of domestic and international resources for HIV?

This paper examines how domestic and international financing for HIV is, and ought to be, distributed. We build a theoretical framework that decomposes domestic and international financing for HIV into non-linear functions of national income, HIV prevalence and government effectiveness. We test this model, paying particular attention to non-linearities and to problems of bad controls, multicollinearity and reverse causality. Finally, we use the fitted values of quartile regressions to study how much countries could reasonably pay domestically, and how much they should receive from donors. Worryingly, countries with higher financial means receive on average more aid per PLHIV than very poor ones, and countries with higher HIV prevalence receive on average less aid per PLHIV. The normative analysis concludes that US$3.08 billion of fiscal space could be created in LIC and MIC. We identify the countries which could be allocated more aid