Health expenditure and economic growth - a review of the literature and an analysis between the economic community for central African states (CEMAC) and selected African countries

Abstract

African leaders accepted in the year 2001 through the Abuja Declaration to allocate 15% of their government expenditure on health but by 2013 only five (5) African countries achieved this target. In this paper, a comparative analysis on the impact of health expenditure between countries in the CEMAC sub-region and five other African countries that achieved the Abuja declaration is provided. Data for this study was extracted from the World Development Indicators (2016) database, panel ordinary least square (OLS), fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) were used as econometric technic of analysis. Results showed that health expenditure has a positive and significant effect on economic growth in both samples. A unit change in health expenditure can potentially increase GDP per capita by 0.38 and 0.3 units for the five other African countries that achieve the Abuja target and for CEMAC countries respectively, a significant difference of 0.08 units among the two samples. In addition, a long-run relationship also exist between health expenditure and economic growth for both groups of countries. Thus African Economies are strongly advised to achieve the Abuja target especially when other socio-economic and political factors are efficient.

Health, Education and Economic Growth Nexus: Evidence from Middle Income Countries

“…(2016) exposed a health-growth causal correlation for a panel of 51 states over 1995, and Piabuo and Tieguhong (2017 also found the same nexus for CEMAC (the Central African Economic and Monetary Community) countries.…”

Exploring the Impact of Healthcare on Economic Growth in Africa

“…Health is increasingly being recognized across the world as a key aspect of development and economic wellbeing of individuals and nations (Piabuo and Tieguhong, 2017). Indeed, there is widespread consensus in academic and policy circles that apart from being a human right, health leads to significant economic gains (Bloom et al, 2001;and Well, 2007).…”

“…Furthermore, existing studies on African have not sufficiently tackled country-specific characteristics. Some cross-country studies that exist such as Kouassi et al (2018) and Piabuo and Tieguhong (2017) are specific to some subregions of Africa. This paper empirically examines the relationship between healthcare and economic growth in Africa using a panel data regression framework.…”

Investigating the Determinants of Healthcare Expenditures in Different Healthcare Systems

“…Investigating the determinants of health expenditure is a critical issue in health economics research and literature (1). In spite of the positive effects of spending on healthcare, such as its impacts on economic growth through investment in health (2), less developed and developing countries have no enough financial resources for health sectors due to the low-income level. This leads governments to transfer financial resources from other sectors to the health sector and that is why the production level may decrease, especially in less developed and developing countries (3).…”

“…Previous studies investigated different factors affect-ing health expenditures both in micro and macro levels, and showed that income is a very important factor that explains the level and growth of health expenditures among different nations (1). Prior research, predominantly in Organization for Economic Co-operation and Development (OECD) countries, reported that income elasticity was significantly above unity (1,2,4). In developing nations, most studies show that this elasticity was below the unity and therefore, concluded that health is a necessary good (1,3).…”