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More on the effectiveness of public spending on health care and education: a covariance structure model

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  • Emanuele Baldacci

    (International Monetary Fund, Washington, DC, USA)

  • Maria Teresa Guin-Siu

    (International Monetary Fund, Washington, DC, USA)

  • Luiz De Mello

    (International Monetary Fund, Washington, DC, USA)

Abstract

Using data for a sample of developing countries and transition economies, this paper estimates the relationship between government spending on health care and education and selected social indicators. Unlike previous studies, where social indicators are used as proxies for the unobservable health and education status of the population, this paper estimates a latent variable model. The findings suggest that public spending is an important determinant of social outcomes, particularly in the education sector. Overall, the latent variable approach yields better estimates of a social production function than the traditional approach, with higher elasticities of social indicators with respect to income and spending, therefore providing stronger evidence that increases in public spending do have a positive impact on social outcomes. Copyright © 2003 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 15 (2003)
Issue (Month): 6 ()
Pages: 709-725

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Handle: RePEc:wly:jintdv:v:15:y:2003:i:6:p:709-725

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Web page: http://www3.interscience.wiley.com/journal/5102/home

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  1. Bidani, Benu & Ravallion, Martin, 1997. "Decomposing social indicators using distributional data," Journal of Econometrics, Elsevier, Elsevier, vol. 77(1), pages 125-139, March.
  2. Ritha S. Khemani & Sanjeev Gupta & Calvin A. McDonald & Louis Dicks-Mireaux & Marijn Verhoeven, 2000. "Social Issues in IMF-Supported Programs," IMF Occasional Papers 191, International Monetary Fund.
  3. Gupta, Sanjeev & Verhoeven, Marijn & Tiongson, Erwin R., 2002. "The effectiveness of government spending on education and health care in developing and transition economies," European Journal of Political Economy, Elsevier, Elsevier, vol. 18(4), pages 717-737, November.
  4. Filmer, Deon & Hammer, Jeffrey S & Pritchett, Lant H, 2000. "Weak Links in the Chain: A Diagnosis of Health Policy in Poor Countries," World Bank Research Observer, World Bank Group, World Bank Group, vol. 15(2), pages 199-224, August.
  5. Alberto Alesina & Eliana La Ferrara, 1999. "Participation in Heterogeneous Communities," NBER Working Papers 7155, National Bureau of Economic Research, Inc.
  6. Flug, Karnit & Spilimbergo, Antonio & Wachtenheim, Erik, 1998. "Investment in education: do economic volatility and credit constraints matter?," Journal of Development Economics, Elsevier, Elsevier, vol. 55(2), pages 465-481, April.
  7. William C. Hsiao, 2000. "What Should Macroeconomists Know About Health Care Policy: A Primer," IMF Working Papers 00/136, International Monetary Fund.
  8. Simon Appleton & John Hoddinott & John MacKinnon, 1996. "Education and health in sub-Saharan Africa," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 8(3), pages 307-339.
  9. Tulkens, H. & Vanden Eeckaut, P., . "Non-parametric efficiency, progress and regress measures for panel data: Methodological aspects," CORE Discussion Papers RP, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) -1132, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  10. Filmer, Deon & Pritchett, Lant, 1999. "The impact of public spending on health: does money matter?," Social Science & Medicine, Elsevier, Elsevier, vol. 49(10), pages 1309-1323, November.
  11. La Ferrara, Eliana & Alesina, Alberto, 2000. "Participation in Heterogeneous Communities," Scholarly Articles 4551796, Harvard University Department of Economics.
  12. Marijn Verhoeven & Sanjeev Gupta & Erwin Tiongson, 2001. "Public Spendingon Health Care and Poor," IMF Working Papers 01/127, International Monetary Fund.
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Cited by:
  1. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2008. "Does Aid for Education Educate Children? Evidence from Panel Data," World Bank Economic Review, World Bank Group, World Bank Group, vol. 22(2), pages 291-314, April.
  2. Monica Ospina, 2010. "The effect of social spending on income inequality: An analysis for Latin American countries," DOCUMENTOS DE TRABAJO CIEF, UNIVERSIDAD EAFIT 010615, UNIVERSIDAD EAFIT.
  3. Uchimura, Hiroko & Jutting, Johannes, 2007. "Fiscal Decentralization, Chinese Style: Good for Health Outcomes?," IDE Discussion Papers, Institute of Developing Economies, Japan External Trade Organization(JETRO) 111, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  4. Hiroko Uchimura & Johannes P. Jütting, 2007. "Fiscal Decentralisation, Chinese Style: Good for Health Outcomes?," OECD Development Centre Working Papers 264, OECD Publishing.
  5. Mohamed Dridi, 2014. "Corruption and Education: Empirical Evidence," International Journal of Economics and Financial Issues, Econjournals, vol. 4(3), pages 476-493.
  6. Carl Grekou & Romain Perez, 2014. "Child Mortality in sub-Saharan Africa: Why Public Health Spending Matters," EconomiX Working Papers 2014-28, University of Paris West - Nanterre la Défense, EconomiX.
  7. Roland Craigwell & Danielle Bynoe & Shane Lowe, 2012. "The effectiveness of government expenditure on education and health care in the Caribbean," International Journal of Development Issues, Emerald Group Publishing, Emerald Group Publishing, vol. 11(1), pages 4-18, April.
  8. Lee, Jong-Wha & Francisco, Ruth, 2012. "Human capital accumulation in emerging Asia, 1970–2030," Japan and the World Economy, Elsevier, Elsevier, vol. 24(2), pages 76-86.
  9. Carmignani, Fabrizio, 2008. "The impact of fiscal policy on private consumption and social outcomes in Europe and the CIS," Journal of Macroeconomics, Elsevier, Elsevier, vol. 30(1), pages 575-598, March.
  10. Emanuele Baldacci & Qiang Cui & Benedict J. Clements & Sanjeev Gupta, 2004. "Social Spending, Human Capital, and Growth in Developing Countries," IMF Working Papers 04/217, International Monetary Fund.
  11. Furukawa, Mitsuaki & Takahata, Junichiro, 2013. "Is GBS Still a Preferable Aid Modality?," Working Papers, JICA Research Institute 50, JICA Research Institute.
  12. Raileanu Szeles, Monica, 2014. "A Multidimensional Approach to the Inclusiveness of economic Growth in the New Member States," Journal for Economic Forecasting, Institute for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 5-24, June.
  13. Baldacci, Emanuele & Clements, Benedict & Gupta, Sanjeev & Cui, Qiang, 2008. "Social Spending, Human Capital, and Growth in Developing Countries," World Development, Elsevier, Elsevier, vol. 36(8), pages 1317-1341, August.

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