Outsourcing and Public Expenditure: An Aggregate Perspective with Regional Data

Financing healthcare in sub-Saharan Africa (SSA) is characterized by high levels of out-of-pocket (OOP) payments for healthcare. This renders many individuals vulnerable to poverty and deviates from the Universal Health Coverage (UHC) goal of providing financial protection for healthcare. We examined the relative effects of public and external health spending on OOP healthcare payments in SSA. We used the system generalized method of moments (GMM) estimator and data from the World Bank's World Development Indicators for 43 SSA countries from 2000 to 2017. The results show that reductions in OOP payments are higher with increases in public spending than external spending. This means increases in public health spending, compared with external health spending, will increase the pace towards achieving the financial protection goal of UHC in SSA. But since government spending is limited by fiscal space and parliamentary approval, public health spending through social health insurance might provide a regular means of financing healthcare to speed up achieving the financial protection goal in SSA countries.

In most OECD countries, health spending has been increasing over the last decades, often surpassing GDP growth. Current challenges faced by health systems - including the COVID-19 pandemic - pose additional concerns regarding whether societies can sustain continuous health spending growth. Such problem is particularly relevant in the context of public health spending. In the absence of significant economic growth, the room for further increases in public health spending without constraining other public spending is somewhat limited.On this paper I propose an exploratory analysis on the concept of financial sustainability of public health spending. I relate the sustainability concept with fiscal space of public finances and with the crowding-out of other public expenditures. I develop a static model where health contributes directly both to utility and output.The model suggests that increases on public health spending are not necessarily undesirable from a public finances' standpoint: the crowding-out of non-health public expenditures depends on the tax rate and coverage level of public health spending. Thus, economic growth is not a sufficient condition to achieve financial sustainability of health spending. Moreover, achieving financial sustainability by adjusting coverage levels might compromise ensuring the social sustainability of public health spending. Hence, this paper contributes to the debate on whether current increases of public health spending are desirable and sustainable.

Recent scientific research has advanced the measurement of the relative performance of organizations and the efficiency of public spending, based on analyzes of the services offered and results achieved. However, from the methodological point of view, there are several methods to analyze the performance and efficiency of spending in the private and public sectors. In this sense, the present study performs a systematic bibliometric review to analyze all scientific publications on the efficiency of public spending published in the last 20 years. The results show that most cost-efficiency analyzes have been limited to education and health expenditures and have used quantitative analysis, mainly through the application of data-involution analysis. The present review is a first step in mapping scientific publications on efficiency in public spending, which will support researchers and managers to make public spending more efficient.

Corruption, being linked to institutions of power, affects the efficiency of using public funds in a country. This happens, in particular, due to distortions in the structure of public expenditure, worsening quality and decreasing accessibility of public services, and overpricing of public services. The consequences of corruption that arise in different areas of human activity often become subject of scientific investigations performed by reputable scientists. However, the issue of the impact of corruption on public spending efficiency in the countries with different levels of democratic development has not been researched. The aim of this study is to determine the impact of corruption on the efficiency of public spending across the world (in 166 countries for the period from 2004 until 2017). The research is carried out by applying regression analysis to indicators characterizing the level of corruption and the efficiency of public spending obtained from large-scale survey data collected by major international organizations and aggregated in the World Bank’s “World Development Indicators” database. The analysis is also performed by using k-means clustering method to group countries into 4 clusters by the level of democracy and to build refined one-factor econometric models for each of them.The study revealed strong correlation relationship between corruption and public spending efficiency. It has been determined that a unit increase in corruption perceptions (a decrease in corruption) leads to a marginal increase in the efficiency of public spending by 0.931 units in the simple linear regression model and by 0.807 units in the multiple regression model. The study also showed that the impact of corruption on public spending varies depending on the level of democracy in a country. In the countries with low democracy levels, a unit decrease in corruption increases the efficiency of public spending by 0.923 units, whereas a similar decrease in corruption in the countries with high democracy levels will increase public spending efficiency only by 0.701 units. The findings of this study allow us to determine with higher accuracy the effects of corruption reduction measures on the efficiency of public spending.

Purpose: This study aims to measure the impact of public spending on basic education in São Paulo cities on the efficiency of public educational expenditure. Method: The calculation of the efficiency is based on the Data Envelopment Analysis (DEA), having as input the public expenditures in education in the years 2014 to 2017 and output the municipal score of Prova Brasil 2017. The measurement of the impact of public expenditures on efficiency is based on the technique of Multiple Linear Regression (MLR) by Ordinary Least Squares (OLS), having as explanatory variables educational expenses classified as wages, purchases, travel, interest and permanent materials, and variable response efficiency index of public expenditure. Results: From the statistical models of MLR different regression coefficients were obtained, which estimate the change in the efficiency index of public expenditure when the expenditure is increased or withdrawn. The results expressed that there is a negative correlation between all categories of the expenditure element and the efficiency of public educational spending in the period from 2014 to 2017. Contributions of the Study: This study, in a pioneering way, adopts the budget accounting classification of the categories of the element of the expense, thus approaching the study of the efficiency of the closest possible object to which the classification of the expenditure refers.

BackgroundMalawi is one of a handful of countries that had resisted the implementation of user fees, showing a commitment to providing free healthcare to its population even before the concept of Universal Health Coverage (UHC) acquired global popularity. Several evaluations have investigated the effects of key policies, such as the essential health package or performance-based financing, in sustaining and expanding access to quality health services in the country. Understanding the distributional impact of health spending over time due to these policies has received limited attention. Our study fills this knowledge gap by assessing the distributional incidence of public and overall health spending between 2004 and 2016.MethodsWe relied on a Benefit Incidence Analysis (BIA) to measure the socioeconomic inequality of public and overall health spending on curative services and institutional delivery across different health facility typologies. We used data from household surveys and National Health Accounts. We used a concentration index (CI) to determine the health benefits accrued by each socioeconomic group.ResultsSocioeconomic inequality in both public and overall health spending substantially decreased over time, with higher inequality observed in overall spending, non-public health facilities, curative health services, and at higher levels of care. Between 2004 and 2016, the inequality in public spending on curative services decreased from a CI of 0.037 (SE 0.013) to a CI of 0.004 (SE 0.011). Whiles, it decreased from a CI of 0.084 (SE 0.014) to a CI of 0.068 (SE 0.015) for overall spending in the same period. For institutional delivery, inequality in public and overall spending decreased between 2004 and 2016 from a CI of 0.032 (SE 0.028) to a CI of -0.057 (SE 0.014) and from a CI of 0.036 (SE 0.022) to a CI of 0.028 (SE 0.018), respectively.ConclusionsThrough its free healthcare policy, Malawi has reduced socioeconomic inequality in health spending over time, but some challenges still need to be addressed to achieve a truly egalitarian health system. Our findings indicate a need to increase public funding for the health sector to ensure access to care and financial protection.

Several studies analyze the determinants of public spending efficiency. However, states fragility is often overlooked. This paper contributes to the large literature on public spending by examining the effect of states fragility. The empirical analysis covers 99 developing countries for the period 2006–2019. Using several empirical approaches, this analysis finds that states fragility negatively affects the efficiency of total public spending. The negative effect remains significant when the efficiency score is disaggregated by health and education spending. Using the components of states fragility, only factionalized elites, uneven development, and demographic pressures have no effect on the efficiency of public spending. This suggests that policymakers need to reduce political, socioeconomic, and security weaknesses-the different dimensions of states fragility-in order to increase resilience and manage resources effectively. JEL Codes:H7, H75, H50, I0

Mortality reductions from marginal increases in public spending on health

This paper analyses the efficiency of public spending in the education and health sectors of Cameroon, Chad and Central African Republic. It also examines the institution and economic factors influencing spending efficiency in these sectors in the countries selected for the period 2000–2012. The public sector efficiency scores are estimated in the first stage by using the non-parametric Data Envelopment Analysis (DEA) approach while in the second stage, the panel data Tobit and the Fractional Logit regression techniques are used to determine the effect of institutional and economic factors on public spending efficiency in the education and health sectors. The results from the estimation show that Cameroon is more efficient than Chad and Central African Republic in its public spending in education and health. Chad is least efficient in public spending in education, although it spends more on education as compared to the other countries in the study. The results also indicate that the quality of budgetary and financial management has a positive and statistically significant influence on efficiency while corruption has a negative and significant influence on public spending efficiency in the education and health sectors. The results put together recommend that efforts should be put in place to curb corruption and improve on the quality of budgetary and financial management.

The third Sustainable Development Goal (SDG) aims to enable everyone to live in good health and to promote the well-being of all. However, despite the various efforts made to achieve this goal, sub-Saharan Africa (SSA) is still characterised by low human longevity. To increase longevity, authors have stressed the importance of public spending on health. However, continuous borrowing and servicing of public debt deprive the SSA of funds that could be devoted to public spending on health. In this context, this research provides evidence on how public debt mitigates the effect of public health spending on human longevity in SSA. Using public indebtedness as a transition variable, this paper uses dynamic panel threshold regression to analyse the effects of public health expenditure on human longevity in 27 SSA countries covering the period 2010–2020. The results reveal a nonlinear relationship between public health spending and human longevity. This research shows that a level of public debt greater than 35.1348% of gross domestic product leads to a reduction in public spending on health and a decrease in human longevity. In view of these results, the governments of SSA countries must strengthen prudent budgetary measures to reduce public debt and increase the mobilisation of domestic resources to finance the health sector.Supplementary InformationThe online version contains supplementary material available at 10.1186/s13561-025-00673-0.

ABSTRACT: One of the most fundamental yet unresolved health policy issues is whether public expenditure on healthcare leads to improved health outcomes. Given that health reflects one of the critical aspects of human capital, having implications for economic growth and other development goals, there has been enormous advocacy towards investing significantly in the health systems across the countries to improve the overall health status. However, the effect of public spending on health outcomes remains inconclusive. The present paper analyses the impact of public health spending on mortality probability, taking into account the role of governance while treating public spending as an endogenous variable. The study uses individual level data from the National Family Health Survey (NFHS) Round 5 and a few state-level characteristics. For estimation purpose, it uses a two-level mixed effect model to capture the benefit incidence of public spending on Individual mortality probability. The findings reveal that public spending has a significant but differential impact on mortality across the Indian States, whereas the quality of governance is found to be a mediator. Given a level of public spending, States with better government effectiveness and rule of law can translate public health spending more effectively in reducing mortality at the individual level. The study also found heterogeneous mortality status across gender, location of stay, wealth status, and age groups with a differential impact of public spending across gender, wealth, and age groups. The variation in average distance of mortality probability level in each state from the overall mean mortality probability indicates that the states are very different in terms of health challenges that they are facing. The policy options call for state-specific health interventions to reduce the mortality rather than one-size-fits-all health policies. There needs to more unconditional grants/transfers from the Union Government to the States so that states will be able to tailor policy responses to address the unique challenges faced by the respective states. At the same time, states need to adopt output-based conditions with greater flexibility to deliver services and greater accountability to improve transparency, governance quality, and implementation capacity.

Background Benefit incidence analysis (BIA) is a tool to estimate the equity of healthcare benefits accrued to individuals across socio-economic groups. The results help to illustrate the extent of the effectiveness of public health resource allocation on public health by the government in meeting the needs of vulnerable populations. This article represents the most recent BIA completed in India and presents an analysis of the distribution of public spending in outpatient and inpatient care. Purpose This paper presents a benefit incidence analysis of the distribution of public spending in outpatient and inpatient care in India. Methods Benefit Incidence Analysis estimates healthcare benefit equity across socioeconomic groups. Data from the 71st National Sample Survey Organisation round was used for analysis. Disease burden, out-of-pocket expenses, and non-utilisation of public health services for outpatient and inpatient care were analysed. Concentration curves and indices were calculated for rural and urban areas. Results In rural areas, the utilisation of public health facilities for outpatient and inpatient care is concentrated among non-poor individuals but is more pro-poor for outpatient care. When both outpatient and inpatient care are considered together, public health spending approaches a more equitable distribution. However, for inpatient care, public health spending is more pro-poor, whereas for outpatient care, it is more pro-rich. In rural areas, public health spending on outpatient and inpatient care is more pro-poor compared to urban areas, where it tends to be more pro-rich. Conclusion Our analysis of equity between urban and rural health services using BIA reveals that public spending has not resulted in significantly pro-poor services in India.

Central America has come a long way both in terms of economic and political stability. Increasingly the region is focusing on implementing productivity-enhancing reforms as well as supporting reductions in poverty and inequality. This report analyzes recent trends in public social spending in Central America from 2007 to 2014, conducts international benchmarking, examines measures of the effectiveness and efficiency of social spending, and discusses the quality of selected institutions influencing this spending. We examine total social spending, as well as detailing its four components: public spending on the education, health, and social protection and labor (SPL) sectors. In analyzing public social spending, the report addresses three crucial policy issues: (a) how to improve the coverage and redistributional incidence of public social spending; (b) how to enhance the effectiveness and efficiency of public social spending; and (c) how to strengthen the institutions governing public spending in the social sector. While based heavily on a series of recent analytical social spending studies in six countries in the subregion—Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama—this report also takes a broader regional perspective and includes some comparisons to countries in other regions.

The US spends two times more than the OECD average in health expenditure but has a much smaller portion of public health spending to total health expenditure than other OECD countries. While it has been suggested that public health and social services spending is crucial to promoting health outcomes, less is known about what drives variations in public health expenditure across regions. This study aims to examine whether political fragmentation inlocal governance is associated with variations in public health and social services expenditures. Using the US Census of Governments, we constructed a panel dataset of political fragmentation and local government spending patterns (1997-2012) for 792 US counties (population > 60,882, top 25%) and employed Least Squares Dummy Variable (LSDV) and Generalized Estimating Equations (GEE) models. We found that per capita public health spending tended to be smaller in areas where the degree of political fragmentation was higher (Coef: - 0.034; p < 0.01), particularly when general-purpose governments were more fragmented (Coef: - 0.087; p < 0.001). The proportion of public health spending alsodecreased when local governments were more fragmented (Coef: - 0.012; p < 0.001). Social services expenditures and their proportions to total government expenditure fell with an increase in the degree of political fragmentation. Our findings suggest that fragmented governance settings, in which localities are more likely to face competition with others, may lead to a reduction in public spending essential for population health and that political fragmentation can also have a deterrent effect on broader categories of health-related social services spending.

PurposeThis study aims to examine the challenges and risks in public procurement, focusing on Greece’s context within the EU framework. It seeks to provide guidance on mitigating potential risks throughout different stages of public procurement by leveraging the knowledge of Greek professionals and existing literature. The research explores the implementation of the national public procurement plan in Greece, aiming to accelerate contract awards, reduce bureaucracy, promote competition and encourage cost-effectiveness among contracting authorities.Design/methodology/approachThe study uses a qualitative approach, combining a literature review with expert interviews. Greek professionals with extensive experience in public procurement were consulted to gather insights on current practices, challenges and risk mitigation strategies. The research also analyzes EU public procurement strategies and their implementation in Greece. This mixed-method approach allows for a comprehensive understanding of the public procurement landscape, integrating theoretical frameworks with practical insights from industry experts.FindingsThe research reveals significant improvements in Greece’s public procurement sector despite persistent irregularities and challenges. Key findings include the need for increased transparency, professionalization of sector staff, support for SMEs and enhanced digitization. The study identifies specific risks at various stages of the procurement process and proposes mitigation strategies. It also highlights the importance of implementing the national public procurement plan to streamline processes, reduce bureaucratic hurdles and promote competition and cost-effectiveness.Social implicationsEffective public procurement management has far-reaching social implications. By improving the quality and efficiency of public spending, it can enhance public services and infrastructure, ultimately benefiting citizens’ quality of life. Increased transparency and fair competition can foster trust between citizens and government, promoting a culture of accountability. Supporting SMEs in public procurement can stimulate economic growth and job creation. Furthermore, promoting sustainability and innovation through procurement practices can contribute to broader societal goals such as environmental protection and technological advancement.Originality/valueThis study provides a unique perspective on public procurement challenges and risk management in Greece within the EU context. By combining insights from experienced Greek professionals with a comprehensive literature review, it offers practical, context-specific guidance for risk mitigation in public procurement. The research contributes to the growing body of knowledge on public procurement reform in EU member states, particularly those facing similar challenges to Greece. Its findings and recommendations can inform policy-making, improve procurement practices and enhance the overall effectiveness of public spending in Greece and potentially other EU countries.