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The core determinants of health expenditure in the African context: Some econometric evidence for policy

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  • Murthy, Vasudeva N.R.
  • Okunade, Albert A.

Abstract

This paper, using cross-sectional data from 44 (83% of all) African countries for year 2001, presents econometric model estimates linking real per-capita health expenditure (HEXP) to a host of economic and non-economic factors. The empirical results of OLS and robust LAE estimators indicate that real per-capita GDP (PRGDP) and real per-capita foreign aid (FAID) resources are both core and statistically significant correlates of HEXP. Our empirical results suggest that health care in the African context is technically, a necessity rather than a luxury good (for the OECD countries). This suggests that the goal of health system in Africa is primarily 'physiological' or 'curative' rather than 'caring' or 'pampering'. The positive association of HEXP with FAID hints that external resource inflows targeting health could be instrumental for spurring economic progress in good policy environments. Most African countries until the late 1990s experienced economic and political instability, and faced stringent structural adjustment mandates of the major international financial institution lenders for economic development. Therefore, our finding a positive effect of FAID on HEXP could suggest that external resource inflows softened some of the macroeconomic fiscal deficit impacts on HEXP in the 2000s. Policy implications of country-specific elasticity estimates are given.

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  • Murthy, Vasudeva N.R. & Okunade, Albert A., 2009. "The core determinants of health expenditure in the African context: Some econometric evidence for policy," Health Policy, Elsevier, vol. 91(1), pages 57-62, June.
  • Handle: RePEc:eee:hepoli:v:91:y:2009:i:1:p:57-62
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    Cited by:

    1. Li-Lin Liang & Andrew J Mirelman, 2014. "Why Do Some Countries Spend More for Health? An Assessment of Sociopolitical Determinants and International Aid for Government Health Expenditures," Health, Nutrition and Population (HNP) Discussion Paper Series 88182, The World Bank.
    2. Wisdom Akpalu & Ametefee K. Normanyo, 2016. "Gold mining pollution and the cost of private healthcare: The case of Ghana," WIDER Working Paper Series 121, World Institute for Development Economic Research (UNU-WIDER).
    3. DO ANGO, Simplicio & AMBA OYON, Claude Marius, 2016. "Health expenditure and Real disposable Income in the ECCAS: A Causal Study using spatial panel approach," MPRA Paper 79684, University Library of Munich, Germany.
    4. Karim Barkat & Zouhair Mrabet & Mouyad Alsamara, 2016. "Does Official Development Assistance for health from developed countries displace government health expenditure in Sub-Saharan countries?," Economics Bulletin, AccessEcon, vol. 36(3), pages 1616-1635.
    5. Mahmut ZORTUK & Sinan ÇEKEN, 2015. "The Relationship between Health Care Expenditures and Income in the Selected Transition Economies: A Panel Smooth Transition Regression Analysis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 105-118, June.
    6. Quattri, Maria A. & Fosu, Augustin Kwasi, 2012. "On The Impact Of External Debt And Aid On Public Expenditure Allocation In Sub-Saharan Africa After The Launch Of The Hipc Initiative," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126879, International Association of Agricultural Economists.
    7. repec:eee:ecolec:v:142:y:2017:i:c:p:104-112 is not listed on IDEAS
    8. Habib Nawaz Khan & Muhammad Arshad Khan & Radzuan B. Razli & Afz’a Binti Sahfie & Gulap Shehzada & Katrina Lane Krebs & Nasrin Sarvghad, 2016. "Health Care Expenditure and Economic Growth in SAARC Countries (1995–2012): A Panel Causality Analysis," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 11(3), pages 639-661, September.
    9. Akinwande A. Atanda & Andrea K. Menclova & W. Robert Reed, 2016. "Is Health Care Infected by Baumol’s Cost Disease? Test of a New Model," Working Papers in Economics 16/33, University of Canterbury, Department of Economics and Finance.
    10. Shailender Kumar Hooda, 2016. "Determinants of Public Expenditure on Health in India: A Panel Data Analysis at Sub-National Level," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 14(2), pages 257-282, December.
    11. Badi H. Baltagi & Raffaele Lagravinese & Francesco Moscone & Elisa Tosetti, 2017. "Health Care Expenditure and Income: A Global Perspective," Health Economics, John Wiley & Sons, Ltd., vol. 26(7), pages 863-874, July.
    12. Vishalkumar Jani & Dholakia, Ravindra H., 2015. "Economic Globalization: Boon or Bane for African Health?," IIMA Working Papers WP2015-07-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    13. Akinwande A. Atanda & Andrea K. Menclova & W. Robert Reed, 2016. "Is Health Care Infected by Baumol’s Cost Disease? Test of a New Model Using an OECD Dataset," Working Papers in Economics 16/04, University of Canterbury, Department of Economics and Finance.
    14. Cockx, Lara & Francken, Nathalie, 2014. "Extending the concept of the resource curse: Natural resources and public spending on health," Ecological Economics, Elsevier, vol. 108(C), pages 136-149.
    15. Błażej Łyszczarz & Ewelina Nojszewska, 2015. "Determinants of health care expenditure in Europe," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 39, pages 183-198.
    16. Cockx, Lara & Francken, Nathalie, 2014. "Extending the concept of the resource curse: natural resources and public spending on health," IOB Working Papers 2014.01, Universiteit Antwerpen, Institute of Development Policy (IOB).

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