Does Water Governance Significantly Affect the Effectiveness of Development Aid on Access to Drinking Water: Insights from Low-Income Countries with a Focus on Sub-Saharan Africa

Purpose: This study investigates how the quality of governance shapes the effectiveness of Official Development Assistance (ODA) in the drinking water sector. Specifically, it examines whether aid for safe water access produces different outcomes under varying institutional conditions. Originality: Although access to safe drinking water is vital for human health, this issue has received limited attention in prior aid effectiveness studies. This research goes beyond general country-level analyses by focusing specifically on drinking water and incorporating governance as an independent variable to test its moderating role through interaction terms. Methodology: A Fixed Effects Model was applied using panel data. The dependent variable is access to drinking water, with ODA and governance as the main predictors, and GDP, population and decentralization as control variables. Interaction terms between ODA and governance were used to test the moderating effect. Result: The analysis shows that water sector ODA does not significantly improve access to safe drinking water (β = -0.820, p < 0.01) when considered independently. However, its interaction with governance was found to be positive and significant (β = 1.210, p < 0.01). This finding indicates that the efficacy of water-related aid is contingent on institutional capacity, with tangible improvements only being observed in contexts where governance is adequately robust. Conclusions and Implication: Simply providing ODA to the water sector is insufficient to expand access to safe drinking water in low-income countries; its effectiveness depends on the quality of governance. Two implications follow. Firstly, recipient countries must meet a minimum governance threshold for aid to be effective. Secondly, developing governance-specific indicators, such as the OECD Water Governance Indicators, can better align programmes with reforms, improve data sharing and enhance effectiveness.