Funding health in developing countries: foreign aid, FDI, or personal remittances?

Abstract

PurposeThis paper presents three models of funding health care in 130 developing countries, based upon a public system, a private system and personal remittances.Design/methodology/approachThe authors trace the funding of health from foreign aid to health funding and health outcomes in the public system, foreign direct investment to health funding in the private system, and personal remittances to health outcomes. This is followed by panel data, fixed effects models subjected to 2-, 3- and 4-stage least squares regressions.FindingsFindings from the first model were that aid in the form of Technical Cooperation Grants funded Infrastructure. Infrastructure Spending due to aid funds Government Health Plans, which reduced the Incidence of Tuberculosis, which in turn reduced Undernourishment and increases Life Expectancy. Other positive health outcomes included reduced Birth Rate and reduced Maternal Mortality. In the second model, Foreign Direct Investment increased Female Employment and GDP per Person, funding Private Health Plans, which increase Life Expectancy, reduced Undernourishment, increased Skilled Care at Birth, increased the Number of Hospital Beds, reduced Maternal Mortality and increased the Birth Rate. In the third model, Remittances influenced both Out-of-Pocket Medical Expenses and Private Plans.Social implicationsPublicly funded programs may be directed to nutrition, increasing life expectancy. Private funding may be directed to improving maternal conditions, with remittances removing the liquidity constraints.Originality/valueThis paper is the first attempt to trace health funding from its sources of foreign aid, foreign direct investment and personal remittances using three separate paths.

Nexus Between Foreign Direct Investment Inflow, Renewable Energy Consumption, Ambient Air Pollution, and Human Mortality: A Public Health Perspective From Non-linear ARDL Approach

“…Furthermore, the FDI inflows can increase the host country's export capacity, causing the developing country to increase its foreign exchange earnings. In addition, FDI may provide a positive effect on human health by increasing the income and higher health spending; however, apart from the positive aspect of FDI, there are some negative effects associated with FDI inflow; like the abundance of FDI inflow can make the host country polluted, which will have adverse consequences on the human health of the host country's residents in terms of death rate, infant mortality, and other serious types of mortalities ( 5 ). The drawback of FDI inflow is the degradation of the air quality caused by a high level of air pollution.…”

How Do Remittances Affect Child Mortality at Different Levels of Mortality? Estimating Unconditional Quantile Treatment Effects on Three Leading Causes of Child Mortality

“…Kakhkharov et al (2021), however, finds that remittances reduce health spending in Uzbekistan, suggesting this supports the view that remittances are channeled to consumer goods. At the macro-level, some studies find that remittances increase access to health care services and private health expenditure (Abraham & Tao, 2021; Azizi, 2018; Drabo & Ebeke, 2011; Yol, 2017). However, Terrelonge (2014) finds that the effect of remittances on household health spending is insignificant, while finding that remittances improve child nutritional status.…”

Does External Debt Promote Human Longevity in Developing Countries? Evidence from West African Countries

“…The study demonstrated that external debt worsens the welfare of SSA countries. However, Abraham and Tao ( 2021 ) conducted a study for 130 developing countries by studying the contribution of foreign health aid on life expectancy. Panel FE, 2-, 3- and 4-stage least squares techniques were employed by the study to express that foreign health aid increases life expectancy.…”