Health Expenditure and Health Outcomes in Sub-Saharan Africa: The Role of Governance and Institutional Quality

Abstract

The effect of both private and public health expenditures on health outcomes has received much attention in the literature. However, how governance and institutional quality mediate between these health expenditures and health outcomes have attracted limited attention as far as SubSaharan Africa (SSA) is concerned, thus, necessitating this study. This study used the system generalized method of moment estimation technique. It covered 22 Sub-Saharan Africa countries with data spanning from 2000 to 2015. Health outcomes used in the study are infant mortality, under-five mortality and life expectancy at birth. The results from the study show that governance and institutional quality significantly enhance the effect of both private and public health expenditures in achieving better health outcomes. Precisely, holding health expenditures constant, quality institutions will aid in public health expenditure reducing infant mortality by 2.8 per 1,000 live births and improve life expectancy by 0.03 years. Likewise, quality institutions will mediate private health expenditure to reduce infant mortality by 1.6 per 1,000 live births and increase life expectancy by 0.04 years. Although effective governance is significant in mediating public health expenditure to ensure reduced under-five mortality, the mediating role of effective governance on private health expenditure is not significant in achieving better health outcomes. Other variables that are statistically significant in promoting good health are nourishment and access to good sanitation facilities. It is therefore important for countries within SSA to empower their institutions with the needed tools and legislation to enable them perform their functions to their full capacity and as well provide the mechanism for assessing the performance of the institutions to ensure that health outcomes are enhanced.