Spending on healthcare may lead to improved health outcomes, which can stimulate human capital growth, increase productivity, and boost the economy. Accordingly, this paper aims to assess whether health spending influences the growth of lower-middle-income countries between 2000 and 2019 in both short- and long-term. Since government and private health expenditures account for the vast majority of healthcare expenditures, the study employs two models to examine whether health expenditures affect economic growth. The first model examines private health spending’s influence on economic growth, whereas the second model analyzes general government health spending’s influence on economic growth. The study uses "cross-sectional autoregressive distributed lag (CS-ARDL)" method, along with extra diagnostic and specification tests. The findings of the two models for the overall sample reveal that health spending had no significant influence on GDP per capita due to the insignificant health spending in these countries. Moreover, the study divides the main data set into two groups based on the average current health expenditure as a percentage of GDP from 2000 to 2019. The first subgroup includes the countries with an average health expenditure lower than 5%, and the second subgroup includes the countries with an average equal to or greater than 5%, and the study conducts the CS-ARDL technique on both models for these subgroups. The findings reveal that all variables are insignificant in both models for the first subgroup. For the second subgroup, all variables are insignificant in both models except government health expenditure which is significant in the long term with economic growth, indicating that increasing health government spending may affect economic growth in the long term. Therefore, lower-middle-income countries have to prioritize public health spending and develop alternative funding sources, while also supporting growth-oriented policies and collaborating with private health sector.
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غالي, شرين. (2023). Does health spending affect the economic growth of lower-middle-income economies? CS-ARDL approach. المجلة المصرية للتنمية والتخطيط, 31(2), 106-131. doi: 10.21608/inp.2023.307099
MLA
شرين غالي. "Does health spending affect the economic growth of lower-middle-income economies? CS-ARDL approach". المجلة المصرية للتنمية والتخطيط, 31, 2, 2023, 106-131. doi: 10.21608/inp.2023.307099
HARVARD
غالي, شرين. (2023). 'Does health spending affect the economic growth of lower-middle-income economies? CS-ARDL approach', المجلة المصرية للتنمية والتخطيط, 31(2), pp. 106-131. doi: 10.21608/inp.2023.307099
VANCOUVER
غالي, شرين. Does health spending affect the economic growth of lower-middle-income economies? CS-ARDL approach. المجلة المصرية للتنمية والتخطيط, 2023; 31(2): 106-131. doi: 10.21608/inp.2023.307099
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