The Relationship Between Government Expenditure on Health and GDP in Turkey

Abstract

Today, rapid increases in government health expenditures constitute a serious problem for governments and households. While there is an extensive literature in this field in the OECD countries, the number of studies in the developing countries is quite inadequate. Although in Turkey there are some studies in this subject, theoretical and empirical studies are insufficient. There is a positive relationship between health expenditure and particularly GDP as one of the factors which have an influence on health expenditure increase. GDP is an important exogenous variable which affects health expenditure. In empirical studies on the relationship between GDP level and health expenditure, the existence of a generally unidirectional relationship from GDP to health expenditure has been determined. However in some studies, there are findings suggesting a relationship of causality between the two variables. It has been observed that in Turkey there have been a rapid increase in health expenditure in the recent years and that the share of government expenditure on health in total expenditure on health has increased substantially. In this study parametric Pearson test and nonparametric Spearman rank correlation test have been conducted in order to determine the relationship between government expenditure on health and GDP. Test results have been found to be statistically significant. The analysis has determined that there is a unidirectional, positive, and strong relationship between the two variables. The findings correspond to those in the literature, and there is a definite correlation between GDP and total government expenditure on health.