Abstract
The study aims to determine the effect of health expenditures on economic growth while taking into account the quality of health institutions, keeping in view the fact that it’s not just the level, rather quality of expenditures or institutions that matters. Our hypothesis was where institutions are better health investment in health brings more economic growth as compared to those with low quality institutions. To attain that objective the standard neo-classical Solow Growth Model at steady-state level was taken as theoretical framework and made a production function adding institutional quality proxied by government effectiveness along with other variables like health expenditure, primary education completion rate, population growth etc. For estimation purposes, data for the sample of 20 South, East Asian and Pacific developing countries was used for the period 1995-2017. It was found that if health expenditures adjusted for the quality of government expenditures increase by 100%, then the economic growth will increase by 5%.
Highlights
Health spending and Health outcome linkages have been studied across the world with different lenses
Health capital would be taken as a distinct input for the production function as capital and labor. This approach is followed in this study, where we wish to observe the influence of health expenditures on growth, but we have extended it with institutional quality within this augmented neoclassical framework, i.e., Augmented Solow Model (ASM)
In the first step a simple OLS regression is applied which is based on the assumption that there is no Fixed Effect and Random Effect
Summary
Health spending and Health outcome linkages have been studied across the world with different lenses This linkage is very weak for the countries where institutional issues persist such as imperfect research and complicated data to design effective policies, but evidence on the nature of health institution quality in developing countries has begun to emerge. A lot of work has been done in health expenditures economic growth literature (some review is provided ) but very few studies focus on the quality of expenditure or institutions alongside the health investments. We have presented some literature review, followed by the theoretical model in section 3 where we have extended the basic Solow growth model by adding the health expenditures and institutional quality variables, after that section 4 has the data and econometric methodology is described.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
