Can Foreign Health Assisance Reduce the Medical Brain Drain ?

This paper analyses the impact of foreign health aid on the emigration rates of physicians. We use a panel database to investigate the emigration of physicians from 192 source countries to 17 destination countries between 1995 and 2004. First, we investigate the direct impact of health assistance using the generalised method of moments (GMM) and highlight a significant negative effect of foreign health assistance on the medical brain drain. Moreover, we analyse whether this effect of health aid is more effective in a context of good governance. We find that health aid is more effective at reducing physicians' emigration rates when the levels of corruption and inflation are low.