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Fiscal space for health in Sub-Saharan African countries: an efficiency approach

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  • Novignon, Jacob
  • Nonvignon, Justice

Abstract

The study argues that potential savings from efficiency could be effective alternative to increasing health system financing in SSA. Health system efficiency estimates were derived from the Data Envelopment Analysis and Stochastic Frontier Analysis and used to compute potential gains from efficiency. Data was sourced from the World Bank's world development indicators for 45 SSA countries in 2011. The results reveal that average potential saving in health expenditure from improved efficiency was 0.10% and 0.75% of GDP per capita in the DEA and SFA models, respectively. The results also showed that a 1% increase in efficiency of health expenditure reduced infant mortality rate by 0.91% compared to 0.40% reduction in infant mortality if health expenditure increased by 1%. The results imply that in the face of significant economic challenges and burden on government budget, improving health expenditure efficiency to create some fiscal space will be an important step.

Suggested Citation

  • Novignon, Jacob & Nonvignon, Justice, 2015. "Fiscal space for health in Sub-Saharan African countries: an efficiency approach," MPRA Paper 63015, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:63015
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    References listed on IDEAS

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    1. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    2. Peter Okwero & Ajay Tandon & Susan Sparkes & Julie McLaughlin & Johannes G. Hoogeveen, 2010. "Fiscal Space for Health in Uganda," World Bank Publications - Books, The World Bank Group, number 5949.
    3. George Schieber & Cheryl Cashin & Karima Saleh & Rouselle Lavado, 2012. "Health Financing in Ghana," World Bank Publications - Books, The World Bank Group, number 11977.
    4. Mr. Peter S. Heller, 2005. "Understanding Fiscal Space," IMF Policy Discussion Papers 2005/004, International Monetary Fund.
    5. Alan M. Garber & Jonathan Skinner, 2008. "Is American Health Care Uniquely Inefficient?," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 27-50, Fall.
    6. Federico Belotti & Silvio Daidone & Giuseppe Ilardi & Vincenzo Atella, 2013. "Stochastic frontier analysis using Stata," Stata Journal, StataCorp LLC, vol. 13(4), pages 718-758, December.
    7. Pablo Hernández de Cos & Enrique Moral-Benito, 2011. "Health care expenditure in the oecd countries: efficiency and regulation," Occasional Papers 1107, Banco de España.
    8. Novignon, Jacob, 2015. "On the efficiency of public health expenditure in Sub-Saharan Africa: Does corruption and quality of public institutions matter?," MPRA Paper 39195, University Library of Munich, Germany.
    9. World Bank, 2011. "World Development Indicators 2011," World Bank Publications - Books, The World Bank Group, number 2315.
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    Cited by:

    1. Moheddine Younsi & Marwa Bechtini, 2024. "Financing Health Systems in Developing Countries: the Role of Government Spending and Taxation," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 13182-13210, September.
    2. Maryam Yaghoubi & Masoud Vahedi Idehlo & Parisa mehdizadeh & Mohammad Meskarpour Amiri, 2023. "Providing a model for financing the treatment costs during biological crises using the fiscal space development approach," Health Economics Review, Springer, vol. 13(1), pages 1-12, December.
    3. Mr. Olumuyiwa S Adedeji & Mr. Calixte Ahokpossi & Claudio Battiati & Mrs. Mai Farid, 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.

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    Keywords

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    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I1 - Health, Education, and Welfare - - Health

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