Globally, the health status of a population is a major concern. Consequently, studies on improving the health status of a population continue to attract research attention. As far as developing countries are concerned, an array of factors comes into play when it comes to improving populations’ health. However, the empirical evidence on these factors is conflicting. For instance, a number of researchers are of the view that investing in health sectors matters very little in enhancing population health outcomes when a country’s income is controlled for.
In order to reconcile these findings, the World Health Organization (WHO) (2013) has suggested that this contradiction might be a result of countries not spending their health money on the “right” health interventions. While it is true that there is potential for improving the effectiveness of aggregate country-level health spending by improving its allocative efficiency, other studies have suggested the possibility of improving the health outcomes of health expenditures by focusing attention on good governance.
Taking into account these suggestions, this paper examines the relationship between health expenditure and health outcomes, precisely life expectancy rate, by focusing on one variable of good governance (i.e. government effectiveness) to provide clearer evidence on how this variable moderates the relationship between health expenditure and health outcomes using a large panel dataset for 43 developing countries.
Filling this gap in the literature will contribute to the realization of the 2030 Agenda for Sustainable Development as adopted by all the United Nations member states. Particularly, the findings of this paper will contribute empirical evidence to guide African countries as they work toward improving health outcomes to achieve goal three of the Sustainable Development Goals (SDGs). The SDGs recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality and spur economic growth– while tackling climate change and working to preserve our oceans and forests. The declarations include commitments to poverty eradication, development and protection of the environment. Each SDG has a set of targets with indicators to assess progress towards goal achievement.
Our study differs from previous attempts in three distinctive ways, thus, contributing significantly to the literature. First, to the best of our knowledge, we are unaware of any study considering the role of government effectiveness as a moderating factor in investigating the effect of health expenditure on life expectancy in the African context. Thus, we fill a yawning gap in the literature. Second, we employ a recent dataset with larger sample size. Finally, we use the system generalized method of moments (GMM) technique to address the problem of endogeneity and simultaneity bias.
This research makes use of panel data comprising 43 African countries and spans from 2000 to 2018. The dependent variable is life expectancy at birth (LE). According to the World Bank, life expectancy at birth is defined as the number of years a newborn infant would live if prevailing patterns of mortality at the time of its birth were to stay the same throughout its life. Total health expenditure (THE) serves as the main independent variable. Other independent factors include government effectiveness (GE), infant mortality rate (InfM), school enrollment (SE) and economic growth (GDP). For the variables’ definitions, total health expenditure is described as domestic general government health expenditure (% of current health expenditure). Government effectiveness (GE) per the World Bank’s description, captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation and the credibility of the government’s commitment to such policies. Infant mortality rate (InfM) is the number of infants dying before reaching one year of age, per1,000 live births in a given year. School enrollment (SE) is the ratio of children of official school age who are enrolled in school to the population of the corresponding official school age. We measure economic development by gross domestic product (GDP) per capita (current US$). Aside from government effectiveness data which is collected from the Worldwide Governance Indicators (WGI), data for the rest of the variables are retrieved from the World Development Indicators (WDI) of the World Bank.
From the generalized method of moments (GMM), the results indicate that the estimated coefficient of the total health expenditure is positive and statistically significant, signifying a direct relationship between total health expenditure and average life expectancy. Government effectiveness shows a positive significant effect on life expectancy. For the control variables, we find that infant mortality rate reduces life expectancy. Also, the authors also observe that school enrollment and the level of economic activity significantly drive life expectancy.
This study is published in International Journal of Health Governance under Emerald Publishing Limited. Details of the study, methods used, findings and practical implications can be found at: https://www.emerald.com/insight/content/doi/10.1108/ijhg-03-2022-0027/full/html. The following people are the authors of this article: Alhassan Bunyaminu, Ibrahim Mohammed, Ibrahim Nandom Yakubu, Bashiru Shani, & Abdul-Lateef Abukari
