The efficiency of government finanical expenditures before and during the COVID-19 pandemic: A cross-country investigation

Van, Huong Vu; Le, Dao Van; Hoang, Lich Khac; Hien, Ngo Van

doi:10.1016/j.frl.2023.103697

Cited by 4 publications

(2 citation statements)

References 23 publications

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“…This is evidence documented in the work of Gibson-Fall (2021) that the advent of the pandemic caused minimal military expenditure due to a high level of pandemic-related fatalities that prompted increased healthcare expenditure. Also, Van et al (2023) acknowledged that the proportion of government expenditure on health was greater compared to the military during the COVID-19 pandemic, and as a result, the former improved economic productivity while the latter exerted otherwise. Contrarily, Cantekin et al (2022) revealed evidence based on time-varying panel analysis that nations that consistently expend on the military experience lower fiscal stimulus packages, including health provision, during the global pandemic.…”

Section: Theoretical and Empirical Reviewmentioning

confidence: 99%

“…The last strand of the empirical literature on the guns versus butter debate includes several studies that evaluated the effect of the economic crisis on the nexus between military and health expenditures (Gibson-Fall, 2021;Cantekin et al, 2022;Van et al, 2023). Since the occurrence of an economic crisis such as the COVID-19 pandemic causes a far-reaching effect on the population's health, military expenditure may be traded off for healthcare expenditure.…”

Section: Theoretical and Empirical Reviewmentioning

confidence: 99%

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Exploring the Role of Institutional Quality in the Crowding-out Effect of Military Expenditure on Health Expenditure and Outcomes in Africa

Badmus,

Raifu,

Opeloyeru

2024

Preprint

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This study revisits the long-standing debate on the guns-versus-butter phenomenon that spending on military activity crowds out non-military expenditure. By focusing on Africa, we argue that the crowding-out effect of military expenditure on health expenditure extends beyond government health expenditure but also private and out-of-pocket health expenditure and health outcomes. The empirical analysis based on the dynamic two-step system generalized method of moments reveals that modelling the crowding-out effect of military expenditure on health outcomes by omitting institutional quality measures biased the estimates. After the inclusion, there is evidence of the crowding-out effect of military expenditure, which causes government health expenditure to decline by 0.040% and both private and out-of-pocket health expenditure to increase by 0.001% and 0.030%, respectively. The effect of military expenditure on health outcomes exerts an increase in infant mortality by 0.008% but a reduction of 0.007% and 0.089% on life expectancy and maternal mortality rates in Africa. Also, we find that the inclusion of an interaction term of military expenditure and institutional quality only reverses the crowding-out effect on government health expenditure and not on private and out-of-pocket health expenditure in Africa. Similarly, for health outcomes, the favorable effect of the interaction term is only evident for increased life expectancy and reduced maternal mortality rates. We offer policy recommendations to improve fiscal spending on the health sector in Africa as a paramount measure to improve human capital development and provide areas for further empirical contributions.

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Section: Theoretical and Empirical Reviewmentioning

confidence: 99%

Section: Theoretical and Empirical Reviewmentioning

confidence: 99%