Convergence of Health Expenditure in Sub-Saharan Africa: Evidence from a Dynamic Panel
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Date
2015Author
Odhiambo, Scholastica A
Wambugu, Anthony
Kiriti-Ng’ang’a, Tabitha
Language
enMetadata
Show full item recordAbstract
To address the problem of underfunding of health systems in SSA the Abuja Declaration of 2001 set a target to
allocate 15% of a country’s budget to public health expenditure. However there is no empirical evidence on
whether SSA countries are converging or diverging from the target and whether there is significant effect of the
Abuja instrument on other health expenditure indicators. This study tested convergence of health expenditure in
SSA in the post Abuja declaration period. The linear dynamic panel model was estimated by GMM-IV method
on a panel of 41 SSA countries for the period 2000 to 2011. The empirical results show evidence of absolute and
conditional convergence of health expenditure in SSA. Real income per capita, donor funding for health care and
benefitting from HIPC debt relief influenced direction and rate of convergence of health expenditure. The Abuja
policy instrument (public health expenditure as a percent of government) reduced the rate of convergence of
other health expenditure measures except for private health expenditure as percent of total health expenditure
which was increasing in the study. The results imply that continued reliance on donor funding for health systems
directly or through debt relief is likely to delay convergence to Abuja target. SSA governments can formulate
sustainable health financing mechanisms that reduce dependency on external source for health system support in
the long run.
Citation
Journal of Economics and Sustainable Development Vol.6, No.6, 2015Publisher
University of Nairobi