IDEAS home Printed from https://ideas.repec.org/p/erg/wpaper/1335.html
   My bibliography  Save this paper

Who Bears the Burden of Universal Health Coverage? An Assessment of Alternative Financing Policies Using an Overlapping generations General Equilibrium Model

Author

Listed:
  • Sameera Awawda

    (Aix-Marseille University)

  • Mohammad Abu-Zaineh

    (Aix-Marseille University)

  • Bruno Ventelou

    (Aix-Marseille University)

Abstract

In their quest for Universal Health Coverage (UHC), many developing countries use alternative financing strategies including general revenues and budget transfers to expand health coverage to the whole population. Unless a policy adjustment is undertaken, future generations may foot the bill of the UHC. This raises the important policy questions of who bears the burden of the UHC and whether the UHC-fiscal stance is sustainable in the long-term. These two questions are addressed using an overlapping generations model within a general equilibrium framework (OLG-CGE) applied to Palestine. We assessed and compare alternative ways of financing the deficit-ridden UHC (viz. deferred-debt-finance, current, and phased-manner finance) and their implications on intergenerational inequalities. Results show that in the absence of any policy adjustment, the implementation of UHC would explode the fiscal deficit and debt-GDP ratio. This indicates that the UHC-fiscal stance is rather unsustainable in the long-term, thus, calling for a policy adjustment to service the UHC-debt. Among the policies we examined, a current rather, than deferred, debt-finance through consumption taxation emerged to be preferred over other policies in terms of its implications for both fiscal sustainability and intergenerational inequality.

Suggested Citation

  • Sameera Awawda & Mohammad Abu-Zaineh & Bruno Ventelou, 2019. "Who Bears the Burden of Universal Health Coverage? An Assessment of Alternative Financing Policies Using an Overlapping generations General Equilibrium Model," Working Papers 1335, Economic Research Forum, revised 21 Aug 2019.
  • Handle: RePEc:erg:wpaper:1335
    as

    Download full text from publisher

    File URL: http://erf.org.eg/wp-content/uploads/2019/08/1335.pdf
    Download Restriction: no

    File URL: https://bit.ly/30IFE2g
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Balassone, F. & Cunha, J. & Langenus, G. & Manzke, B. & Pavot, J. & Prammer, D. & Tommasino, P., 2008. "Fiscal sustainability and policy implications for the euro area," Working papers 225, Banque de France.
    2. Michael Wickens, 2012. "Macroeconomic Theory: A Dynamic General Equilibrium Approach Second Edition," Economics Books, Princeton University Press, edition 1, number 9743.
    3. van Kippersluis, Hans & Van Ourti, Tom & O'Donnell, Owen & van Doorslaer, Eddy, 2009. "Health and income across the life cycle and generations in Europe," Journal of Health Economics, Elsevier, vol. 28(4), pages 818-830, July.
    4. Jorge Tovar & B. Urdinola, 2014. "Inequality in National Inter-Generational Transfers: Evidence from Colombia," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 20(2), pages 167-187, May.
    5. Creedy, John & Guest, Ross, 2008. "Changes in the taxation of private pensions: Macroeconomic and welfare effects," Journal of Policy Modeling, Elsevier, vol. 30(5), pages 693-712.
    6. Aparnaa Somanathan & Ajay Tandon & Huong Lan Dao & Kari L. Hurt & Hernan L. Fuenzalida-Puelma, 2014. "Moving toward Universal Coverage of Social Health Insurance in Vietnam : Assessment and Options," World Bank Publications - Books, The World Bank Group, number 18885.
    7. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 73-94, Winter.
    8. Tanzi, Vito & Zee, Howell H., 2000. "Tax Policy for Emerging Markets: Developing Countries," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(2), pages 299-322, June.
    9. Pablo Gottret & George Schieber, 2006. "Health Financing Revisited : A Practitioner's Guide," World Bank Publications - Books, The World Bank Group, number 7094.
    10. Mr. Calixte Ahokpossi & Mrs. Mai Farid & Claudio Battiati & Mr. Olumuyiwa S Adedeji, 2016. "A Probabilistic Approach to Fiscal Space and Prudent Debt Level: Application to Low-Income Developing Countries," IMF Working Papers 2016/163, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sèna Kimm Gnangnon & Jean-François Brun, 2020. "Tax reform and fiscal space in developing countries," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(2), pages 237-265, June.
    2. Leanora Alecia Brown & Jorge Martinez-Vazquez, 2015. "International Debt Forgiveness: Who Gets Picked and Its Effect On The Tax Effort Of Developing Countries," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1504, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    3. Godin, M. & Hindriks, J., 2015. "A Review of Critical Issues on Tax Design and Tax Administration in a Global Economy and Developing Countries," LIDAM Discussion Papers CORE 2015028, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Milan Sedmihradsky & Stanislav Klazar, 2002. "Tax Competition for FDI in Central-European Countries," CESifo Working Paper Series 647, CESifo.
    5. Ali Merima & Shifa Abdulaziz B. & Shimeles Abebe & Woldeyes Firew, 2017. "Working Paper 290 - Building Fiscal Capacity The role of ICT," Working Paper Series 2404, African Development Bank.
    6. Kasuga, Hidefumi & Morita, Yuichi, 2012. "Aid effectiveness, governance and public investment," Economic Modelling, Elsevier, vol. 29(2), pages 514-521.
    7. Kodjo Adandohoin, 2021. "Tax transition in developing countries: do value added tax and excises really work?," International Economics and Economic Policy, Springer, vol. 18(2), pages 379-424, May.
    8. Garcia Penalosa, Cecilia & Turnovsky, Stephen J., 2005. "Second-best optimal taxation of capital and labor in a developing economy," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 1045-1074, June.
    9. Zee, Howell H. & Stotsky, Janet G. & Ley, Eduardo, 2002. "Tax Incentives for Business Investment: A Primer for Policy Makers in Developing Countries," World Development, Elsevier, vol. 30(9), pages 1497-1516, September.
    10. James Alm & Mir Ahmad Khan, 2015. "Assessing and Reforming Enterprise Taxation in Pakistan," Working Papers 1513, Tulane University, Department of Economics.
    11. Celikay, Ferdi, 2020. "Dimensions of tax burden: a review on OECD countries," Journal of Economics, Finance and Administrative Science, Universidad ESAN, vol. 25(49), pages 27-43.
    12. Auriol, Emmanuelle & Warlters, Michael, 2005. "Taxation base in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 625-646, April.
    13. Mardan, Mohammed & Stimmelmayr, Michael, 2020. "Tax competition between developed, emerging, and developing countries – Same same but different?," Journal of Development Economics, Elsevier, vol. 146(C).
    14. Kym Anderson & Gordon Rausser & Johan Swinnen, 2013. "Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 423-477, June.
    15. Fjeldstad, Odd-Helge, 2013. "Taxation and Development: a Review of Donor Support to Strengthen Tax Systems in Developing Countries," Working Papers 13683, Institute of Development Studies, International Centre for Tax and Development.
    16. Sawitree S. Asawanuchit & Mr. Hamid R Davoodi & Mr. Erwin H Tiongson, 2003. "How Useful Are Benefit Incidence Analyses of Public Education and Health Spending," IMF Working Papers 2003/227, International Monetary Fund.
    17. Nobuhiro Mizuno & Katsuyuki Naito & Ryosuke Okazawa, 2017. "Inequality, extractive institutions, and growth in nondemocratic regimes," Public Choice, Springer, vol. 170(1), pages 115-142, January.
    18. PriceWaterhouseCoopers, 2011. "Transfer pricing and developing countries," Taxation Studies 0038, Directorate General Taxation and Customs Union, European Commission.
    19. World Bank, 2014. "Poland : Saving for Growth and Prosperous Aging," World Bank Publications - Reports 20441, The World Bank Group.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:erg:wpaper:1335. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/erfaceg.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sherine Ghoneim (email available below). General contact details of provider: https://edirc.repec.org/data/erfaceg.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.