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The effectiveness of government expenditure on education and health care in the Caribbean

  • Roland Craigwell
  • Danielle Bynoe
  • Shane Lowe

Purpose – Investment in human development is considered a means of improving the quality of life and sustaining economic growth in the Caribbean. The purpose of this paper is to assess the efficacy of public spending on health care and education by evaluating the life expectancy and school enrolment rates of these countries. Design/methodology/approach – Using a data set containing 19 Caribbean countries over the period 1995 to 2007 for health care and 1980 to 2009 for education, a Panel Ordinary Least Squares model was employed. Findings – The results revealed that health expenditure has a significant positive effect on health status, while spending on education has no appreciable influence on either primary or secondary school enrolment. Originality/value – Unlike previous Caribbean research, the paper explores a variable for quality in the education system, that is, the pupil-teacher ratio. It also seeks to update the existing Caribbean literature by employing data from 1980 to 2009.

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Article provided by Emerald Group Publishing in its journal International Journal of Development Issues.

Volume (Year): 11 (2012)
Issue (Month): 1 (April)
Pages: 4-18

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Handle: RePEc:eme:ijdipp:v:11:y:2012:i:1:p:4-18
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  1. Lee, J.-W. & Barro, R.J., 1998. "Schooling Quality in a Cross Section of Countries," Papers 659, Harvard - Institute for International Development.
  2. Michael Grossman, 1972. "The Demand for Health: A Theoretical and Empirical Investigation," NBER Books, National Bureau of Economic Research, Inc, number gros72-1, August.
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  4. 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, vol. 18(4), pages 717-737, November.
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  8. Judson, Ruth, 1998. " Economic Growth and Investment in Education: How Allocation Matters," Journal of Economic Growth, Springer, vol. 3(4), pages 337-59, December.
  9. Sudhir Anand & Martin Ravallion, 1993. "Human Development in Poor Countries: On the Role of Private Incomes and Public Services," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 133-150, Winter.
  10. International Monetary Fund, 2002. "Moreon the Effectiveness of Public Spendingon Health Care and Education; A Covariance Structure Model," IMF Working Papers 02/90, International Monetary Fund.
  11. Luiz de Mello & Mauro Pisu, 2009. "The Effectiveness of Education and Health Spending among Brazilian Municipalities," OECD Economics Department Working Papers 712, OECD Publishing.
  12. Mingat, Alain & Jee-Peng Tan, 1998. "The mechanics of progress in education : evidence from cross-country data," Policy Research Working Paper Series 2015, The World Bank.
  13. Mark C. Berger & J. Paul Leigh, 1989. "Schooling, Self-Selection, and Health," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 433-455.
  14. Pradhan, S., 1996. "Evaluating Public Spending: A Framework for Public Expenditure Reviews," World Bank - Discussion Papers 323, World Bank.
  15. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
  16. Mehrotra, S., 1998. "Education for All: Policy Lessons from High-Achieving Countries," Papers 98-005, California Los Angeles - Applied Econometrics.
  17. George Psacharopoulos & Harry Anthony Patrinos, 2004. "Returns to investment in education: a further update," Education Economics, Taylor & Francis Journals, vol. 12(2), pages 111-134.
  18. Rajkumar, Andrew Sunil & Swaroop, Vinaya, 2008. "Public spending and outcomes: Does governance matter?," Journal of Development Economics, Elsevier, vol. 86(1), pages 96-111, April.
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