Effect of Investment in Healthcare One Economic Development in Kenya

Jane Njoki Murango

doi:10.11648/j.jim.20180701.14

Abstract

Economic development can generally refer to an ikncrease in a country's ability to produce goods and services identified by factors such as production, income and spending. Investment in health in this way becomes a significant variable for economic growth or development since investments in different components of health can lead to improved human capital. Kenya has low investment in the health sector which may adversely affect economic development. The purpose of this study was to explore the effect of investment in health on the economic development in Kenya. The specific objectives were to investigate the effect of public investment in health, private investment and investment in health by international non-governmental organizations on the development of the economy of Kenya. A descriptive research design was used in this study. Secondary time series data for 32 years (1985-2016) was collected from Kenya National Bureau of Statistics (KNBS), Institute of Economic Affairs (EIA), World Bank, Ministry of Finance and Ministry of Devolution and Planning. Data analysis was conducted using Stata statistical software. VECM time series model was fitted to the data. Augmented Dickey Fuller unit root test and Johansen test of cointegration were conducted to ensure stationarity of the data. The study results suggested that both public investment in health (β = 0.1149; p 0.05). The study makes the following recommendations. First, the government should channel more funding to the health sector as the current funding of 3.4% of GDP falls below the 7% set by the Abuja Declaration in 2001. Secondly, private entities should be encouraged to increase their investment in the health sector in the country. Lastly, the ministry of health and other government stakeholders should partner with private health service providers and come up with a framework to ensure that private health sector increases its funding to fill up financial deficit health sector. This is because the research concluded that the private health has significant contribution to the overall performance of the health sector.

Highlights

Background of the StudyThe thinking behind the need to take up the research will be provided in the statement of the problem with a brief description of the gaps that the study aims to fill
The results suggest that in the long term, the three independent variables included in the study had an effect on GDP
The results indicate that public investment in health (β = -0.0128; p < 0.05) and private investment in health (β = -0.3685; p < 0.05) had a significant long term causal effect on GDP

Summary

Introduction

Background of the StudyThe thinking behind the need to take up the research will be provided in the statement of the problem with a brief description of the gaps that the study aims to fill. Since the study is based on commonly used and researched concepts that include economic development and investment in health sector, and being an academic research, the study will be found significant to different individuals identified in the section on significance. This will help emphasize on the importance of the study and the need to invest time and the researcher’s resources in order to achieve the expected outcomes.

Objectives

Results

Conclusion