Background: Despite continued global efforts, HIV/AIDS outcomes in developing countries have not made much progress. Poor governance in recipient countries is often seen as one of the reasons for ineffectiveness of aid efforts to achieve stated objectives and desired outcomes.

Objective: This study examines the impact of two important dimensions of governance – control of corruption and democratic accountability – on the effectiveness of HIV/AIDS official development assistance.

Design: An empirical analysis using dynamic panel Generalized Method of Moments estimation was conducted on 2001–2010 datasets.

Results: Control of corruption and democratic accountability revealed an independent effect and interaction with the amount of HIV/AIDS aid on incidence of HIV/AIDS, respectively, while none of the two governance variables had a significant effect on HIV/AIDS prevalence. Specifically, in countries with accountability level below -2.269, aid has a detrimental effect on incidence of HIV/AIDS.

Conclusion: The study findings suggest that aid programs need to be preceded or at least accompanied by serious efforts to improve governance in recipient countries and that democratic accountability ought to receive more critical attention.