This paper examines the relationship between country health spending and selected health outcomes (infant mortality and child mortality), using data from 133 low and middle-income countries for the years 1995, 2000, 2005, and 2006. Health spending has a significant effect on reducing infant and under-5 child mortality with an elasticity of 0.13 to 0.33 for infant mortality and 0.15 to 0.38 for under-5 child mortality in models estimated using fixed effects methods (depending on models employed). Government health spending also has a significant effect on reducing infant and child mortality and the size of the coefficient depends on the level of good governance achieved by the country, indicating that good governance increases the effectiveness of health spending. This paper contributes to the new evidence pointing to the importance of investing in health care services and the importance of governance in improving health outcomes.
To date, international analyses on the strength of the relationship between country-level per capita income and per capita health expenditures have predominantly used developed countries' data. This study expands this work using a panel data set for 173 countries for the 1995-2006 period. We found that health care has an income elasticity that qualifies it as a necessity good, which is consistent with results of the most recent studies. Furthermore, we found that health care spending is least responsive to changes in income in low-income countries and most responsive to in middle-income countries with high-income countries falling in the middle. Finally, we found that 'Voice and Accountability' as an indicator of good governance seems to play a role in mobilizing more funds for health.
The notable increases in funding from various donors for health over the past several years have made examining the effectiveness of aid all the more important. We examine the extent to which donor funding for health substitutes for--rather than complements--health financing by recipient governments. We find evidence of a strong substitution effect. The proportionate decrease in government spending associated with an increase in donor funding is largest in low-income countries. The results suggest that aid needs to be structured in a way that better aligns donors' and recipient governments' incentives, using innovative approaches such as performance-based aid financing.
Office-based pharmacotherapy offers a promising path to improved access to addictions treatment, but prescribing has expanded little beyond the addiction specialist community.
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