Effect of Health Expenditure on per capita GDP Growth in Developing Countries

Abstract

This paper examines the relationship between health expenditure and per capita Gross Domestic Product (GDP) growth in developing countries. The paper further explores whether the impact of health expenditure is different for developing countries as a whole compared with countries in Sub-Saharan Africa. Using the Solow growth model, panel data, and the ‘system’ GMM estimator, I find that economic growth in developing countries, after controlling for other factors is influenced by health expenditure, but the magnitude is slightly higher for SSA. The paper contributes to the literature by addressing the importance of health policies on economic growth in developing countries