DISAGGREGATED HEALTH EXPENDITURE, HIV PREVALENCE AND ECONOMIC GROWTH IN WEST AFRICA : THE AUGMENTED SOLOW GROWTH MODEL APPROACH

Abstract

This study investigated the relationship among health expenditure, HIV prevalence and expansion of productive economic activities in West Africa using sub-regional aggregate time series data from 1992 to 2020. The augmented Solow growth model was adopted to enable us to understand and maximize both the theoretical and empirical anatomy of HIV prevalence as it relates with the expansion of productive economic activities and disaggregated health expenditure in West Africa in the context of a growth theory and to conveniently apply the Hsiao causality framework in the form of a vector autoregressive model. The augmented Solow model theoretically made it possible for us to uniquely identify and specify six (6) bivariate hypotheses-supported models as sustainable fulcrums for the empirical application and validation of the Hsiao causality test. Health expenditure was disaggregated into total, public, household out-of-pocket, and non-household private health expenditures to specifically determine the impact of the relationship between the expansion of productive economic activities and HIV prevalence on each of these components of health expenditure. The results show that the total health expenditure-led growth and private health expenditure-led growth hypotheses were not validated for the sub-region. However, the growth-led total, growth-led public, and growth-led private health expenditure hypotheses are validated for the sub-region. Also, HIV prevalence-led total, HIV prevalence-led public, and HIV prevalence-led private health expenditure hypotheses are validated for West Africa. The study recommended that for sustainable inflows of total, public and private health expenditure into the sub-region, the expansion of productive and growth-enhancing economic activities and HIV mitigation policies should incorporate health expenditure policies both in the long, and short-run periods.
 Keywords: Hsiao causality, HIV Prevalence, Health Expenditure, Economic Growth, 
 Solow Model.
 JEL CLASSIFICATION:C11, C18, I10, I150