This paper examined empirically the overall effect of the project aid fragmentation in the health and education sectors. It focused on the infant and child mortality rate for the health sector and the primary school completion rate for the education sector because they are flagged as important indicators of the MDGs. The research questions in this paper are whether the mitigation of project aid fragmentation leads to the improvement of the two indicators and whether the result differs between health and education. The major findings are the followings: Even if project aid fragmentation is reduced, there may be no reduction in infant and child mortality rates. On the contrary, The rate will be the worst at the mid-range of fragmentation. On the other hand, the reduction of aid fragmentation in countries which receive relatively high external aid will positively impact the primary school completion rate. These findings lead to the conclusion that the effectiveness of aid-fragmentation reduction differs from one sector to another and depends on the degree of aid dependence.
Keywords: aid effectiveness, aid fragmentation, health sector, education sector, MDGs