Public health expenditure and child health outcomes in Sub-Saharan Africa

Abstract

Child mortality is disproportionately high in sub-Saharan Africa. The allocation of public health resources has always been considered a key policy measure to tackle this. But, the results of the empirical testing of the relationship between health spending and the reduction in child mortality are mixed, especially in Sub-Saharan Africa. The impact of public health expenditure on child health outcomes measured by under-five mortality rate is analyzed in this study using a balanced panel of 45 countries in Sub Saharan Africa for the period 1995 to 2018.To account for endogeneity and unobserved country-specific heterogeneity, a log-linear model is estimated using fixed effects and system generalised method of moments (GMM) estimation techniques, following Grossman's production function of health (Grossman, 1972). Among the factors used, GDP per capita, female literacy rate, and access to clean drinking water are considered to be control variables. Secondary data were obtained from World Development Indicators (World Bank, 2023), UNICEF Child Mortality Database, and the African Development Bank Statistics Database (African Development Bank, 2022). The results of fixed effects show that for the 10 percent rise in public health spending per capita, under-5 mortality rate drops by around 1.28 per cent. Estimation of the GMM system confirms the negative relationship is statistically significant and condenses to an elasticity of -0.087, which accounts for the possibility of reverse causality. Also, child mortality is negatively affected by GDP per capita, female education, and clean water access. The robustness of the estimates is confirmed by the diagnostic tests such as Hausman test (Hausman, 1978), Arellano-Bond AR (2) test (Arellano and Bond, 1991) and Hansen test of instrument validity (Hansen, 1982). The study finds that public health spending is required, but not sufficient to achieve child health gains in Sub-Saharan Africa. It is highly dependent on investments in water systems and education. The policy recommendations highlight financing of primary healthcare, public financial management reforms and integrated development of sectors. The results add to the literature in the field of health economics and can inform the policies of governments and development partners working in the context of Sustainable Development Goal 3 (United Nations, 2015).