Impact of development aid on infant mortality: Micro-level evidence from Cote d'Ivoire

The empirical literature has failed to reach consensus on the impact of aid on development outcomes based on aggregate cross-country analysis. This study follows the current trend in the literature on the effectiveness of aid to examine the impact of local-level aid on health outcomes. It combines data on the World Bank's geo-located aid projects with three rounds of Demographic Health Surveys from Cote d'Ivoire and uses difference-in-difference estimation techniques to explore the effects of aid on infant mortality. The results show that proximity to development aid projects is associated with reduced infant mortality. The results hold whether we consider proximity to any aid project or specifically water and sanitation projects. They are also robust to inclusion of mother fixed effects in the model. The evidence suggests that access to prenatal and postnatal healthcare are possible mechanisms through which aid may have negative effects on infant mortality.