US foreign aid restrictions and maternal and children's health: Evidence from the "Mexico City Policy".

ABSTRACT

This paper analyzes the link between foreign aid for family planning services and a broad set of health outcomes. More specifically, it documents the harmful effects of the so-called "Mexico City Policy" (MCP), which restricts US funding for nongovernmental organizations that provide abortion-related services abroad. First enacted in 1985, the MCP is implemented along partisan lines; it is enforced only when a Republican administration is in office and quickly rescinded when a Democrat wins the presidency. Although previous research has shown that MCP causes significant disruption to family planning programs worldwide, its consequences for health outcomes, such as mortality and HIV rates, remain underexplored. The independence of the MCP's implementation from the situation in recipient countries allows us to systematically study its impact. Using country-level data from 134 countries between 1990 and 2015, we first show that the MCP is associated with higher maternal and child mortality and HIV incidence rates. These effects are magnified by dependence on US aid while mitigated by funds from non-US donors. Next, we complement these results using individual-level data from 30 low- and middle-income countries and show that, under the MCP, women have less access to modern contraception and are less exposed to information on family planning and AIDS via in-person channels. Moreover, pregnant women are more likely to report that their pregnancy is not desired. Our findings highlight the importance of mitigating the harmful effects of MCP by redesigning or counteracting this policy.