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This chapter attempts to study the long-term determinants of public and private healthcare expenditure in Hong Kong, by employing time series data over the period from 1990 to 2017. We find that income is not a determinant of either public or private spending per capita on healthcare services. Rather, a higher proportion of elderly will raise public expenditure on health and private spending even more. The share of children within the population will conversely decrease both public and private spending. Results also show that the rising density of doctors decreases both public and private per capita healthcare spending, showing that the supplier-induced demand problem is not an issue in Hong Kong.

The purpose of this paper is to explore the manner in which the degree of substitutability between public and private health expenditures contributes towards the distribution of wealth and political economy outcomes in the long run.

An overlapping generations model with heterogeneous agents where a person’s probability of survival into old age is determined by a variable elasticity of substitution (VES) health production function with public and private expenditures as inputs is developed. Public expenditure on health is determined through a political economy process.

Analytical and numerical results reveal that higher substitutability between private and public expenditures at the aggregate level and a higher share of public spending in the production of health lead to higher long run wealth levels and lower inequality. In the political equilibrium, higher aggregate substitutability between public and private health expenditures is associated with more tax revenue allocated towards public health. For most parameter combinations, the political economy and welfare maximising proportions of tax revenue allocated towards public health care converge in the long run.

The paper is a theoretical investigation of how substitutability between public and private health expenditures affect transitional and long run macroeconomic outcomes. These results are amenable to further empirical investigation.

The findings indicate that policies to improve institutional aspects that yield higher substitutability between public and private health expenditures and returns to public health spending could lead to better long run economic outcomes.

The results provide a political economy explanation for the low investments in public health care in developing countries, where aggregate substitutability between public and private health expenditures is likely to be lower. Furthermore, comparing the political economy and welfare maximising paradigms broadens the scope of the framework developed herein to provide potential explanations for cross-country differences in health outcomes.

This paper adopts an innovative approach to exploring this issue of substitutability in health expenditures by introducing a VES health production function. In an environment where agents have heterogeneous wealth endowments, this specification enables a distinction to be made between substitutability of these expenditures at the aggregate and individual levels, which introduces a rich set of dynamics that feeds into long run outcomes and political economy results.

The purpose of this paper is to employ a two-step approach to investigate the bi-directional causal linkage between: economic growth (measured by GDP) and public expenditure on health; public expenditure on health and infant mortality rate (IMR); and economic growth and IMR in the Indian context.

The present study uses econometric analysis, namely, panel cointegration and Granger causality on 20-year panel data on 16 major Indian states to investigate the causality.

The results suggest GDP to Granger cause public expenditure on health both in the short run and in the long run, but public expenditure on health to Granger cause GDP only in the long run. Further, public expenditure on health and economic growth were found to Granger cause IMR in the long run. However, the reverse linkage from IMR to public expenditure on health and/or economic growth was not significant.

The present study provides support to the existing literature on the effects of economic growth on health expenditure and health outcomes but also raises a question on the time required to realize the same.

The findings have implications for policy makers on the time frame and application of health expenditure to achieve better results.

The present study is one of the first to test the tripartite linkage between economic growth, public health expenditure and health outcomes at a state-level analysis.

Bangladesh is applauded for its achievement in various health and social outcomes though criticized for its failure in properly dealing with governance issues. The purpose of this paper is intends to see how the health outcomes (in case of life expectancy, under-five mortality and adolescent fertility) are impacted by health expenditure (both public and private), per capita income in presence of overall governance and female education. This paper assumes that rapid progress in female education reflects the Bangladeshis’ social responsiveness to change.

This paper uses autoregressive distributed lag technique to estimate the models with data ranges from 1990 to 2016 under two different scenarios.

This study has found that all the explanatory variables exert significant impact on health outcomes. Furthermore, public health expenditure is augmented with a composite governance issue, and this enhances robustness as well as statistical significance of the models. These suggest that the governance issues play a very crucial role to achieve the expected health outcomes. Female secondary enrolment ratio appears with improved coefficients in terms of sign and magnitude for all the health indicators.

This paper contributes to the existing literature showing econometric evidence that highlights the importance of governance and female education in improving health outcomes of Bangladesh apart from health expenditure and per capita gross domestic product.

The purpose of this paper is to investigate the effect of public and private health expenditures on selected maternal-child health outcomes in Sub-Saharan Africa (SSA).

The study utilizes panel data on 40 SSA countries spanning the period 2000-2010. The data are analyzed using the fixed effects estimation technique.

The results indicate that public health expenditure is inversely and significantly related to infant (IMRR) and under-five (U5MR) mortalities in SSA. Though public health expenditure has the a priori negative sign, it has no significant effect on maternal mortality (MMR) in SSA. Further, private health expenditure did not prove to be significant in improving maternal-child health outcomes (IMRR, U5MR and MMR) in SSA.

The implication of the findings is that a percentage point increase in public health expenditure (as a share of GDP) across the region will result in saving the lives of about 7,040 children every year. Hence, it is important for governments in SSA to increase their shares of health expenditure (public health expenditure) in order to achieve improved health outcomes.

Previous studies have not adequately explored the effect of various components of health expenditures – public and private – on health outcomes in the context of SSA. In addition to the focus on maternal-child health variables such as infant, under-five and maternal mortalities, the study accounts for the possibility of a non-linear and non-monotonic relationship between healthcare expenditures and health outcomes.

The study aims to determine whether there is a bidirectional causality relationship between health expenditures and per capita income in Brazil, Russia, India, China, South Africa and Turkey (BRICS+T).

For that purpose, the 2000–2018 period data of the variables were tested with the Kónya (2006) panel causality test. Additionally, the causality relationships between public and private health expenditures and per capita income were also investigated in the study.

According to the analysis results, there is no statistically significant causality relationship from total health expenditures and public health expenditures to per capita income in the relevant countries. Besides, there is a unidirectional causality relationship from private health expenditures to per capita income only in Turkey. On the other hand, a unidirectional causality relationship from per capita income to total health expenditures in China, Russia, Turkey and South Africa and from per capita income to public health expenditures in India, Russia, Turkey and South Africa were determined. Consequently, a causality relationship from per capita income to private health expenditures was found out in Russia and Turkey.

The variables are tested for the first time for BRICS+T countries, vis-à-vis the period under consideration and the method used.

In this paper, the authors assess the responsiveness of OOP healthcare expenditure to macro-fiscal factors, as well as to tax-based, SHI, mixed systems and voluntary PHI financing. Although the relationship between OOP expenditure, macroeconomy, aggregate public and PHI financing is well documented in the existing empirical literature, little is known for the impact of several macro-fiscal drivers and the existing health financing arrangements associated with voluntary PHI on OOP expenditure.

The authors gather panel data by applying three official organizations’ databases. They elaborate static and dynamic panel data methodology to a dataset of 49 European and OECD countries from 2000 to 2015.

The authors’ findings do not indicate a considerable impact of GDP growth and general government debt as a share of GDP on OOP payments. Unemployment rate presents as a positive driver of OOP payments in all three compulsory national health systems post to the 2008 economic crisis. OOP payments are significantly influenced by countries’ fiscal capacity to increase general government expenditure to GDP in SHI and mixed health systems. Additionally, study findings present that government health financing, irrespective of the different health systems structure characteristics, and OOP healthcare payments follow different directions. Voluntary PHI financing considerably counteracts OOP payments only in tax-based health systems.

In the backdrop of a new economic crisis associated to the COVID-19 epidemic, health policy planners have to deal with the emerging unprecedented challenges in financing of health systems, especially for these economies that have to face the fiscal capacity constraints owing to the 2008 financial crisis and its severe recession.

To the best of authors’ knowledge, there is no empirical consensus on the effects of macro-fiscal parameters, different compulsory health systems financing associated with the parallel voluntary PHI institution funding on OOP expenditure, for the majority of European and OECD settings.

The empirical analysis dealt in this paper emphasizes on the impact of military expenditures on out of pocket (OOP) healthcare payments. A sizeable body of defence economics literature has investigated the trade-off between military and public health expenditure, by testing the crowding-out or growth-stimulating hypothesis; does military expenditure scaling up crowd-out or promote governmental resources for social and welfare programs, including also state health financing?

In this study, panel data from 2000 to 2018 for 129 countries is used to examine the impact of military expenditure on OOP healthcare payments. The dataset of countries is categorized into four income-groups based on World Bank's income-group classification. Dynamic panel data methodology is applied to meet study objectives.

The findings of this study indicate that military expenditure positively affects OOP payments in all the selected groups of countries, strongly supporting in this way the crowding-out hypothesis whereby increased military expenditure reduces the public financing on health. Study econometric results are robust since different and alternative changes in specifications and samples are applied in our analysis.

Under the economic downturn backdrop for several economies in the previous decade and on the foreground of a potential limited governmental fiscal space related to the Covid-19 pandemic adverse economic effects, this study provides evidence that policy-makers have to adjust their government policy initiatives and prioritize Universal Health Coverage objectives. Consequently, the findings of this study reflect the necessity of governments as far as possible to moderate military expenditures and increase public financing on health in order to strengthen health care systems efficiency against households OOP spending for necessary healthcare utilization.

Despite the fact that a sizeable body of defence economics literature has extensively examined the impact of military spending on total and public health expenditures, nevertheless to the best of our knowledge there is no empirical evidence of any direct effect of national defence spending on the main private financing component of health systems globally; the OOP healthcare payments.

The purpose of this paper is to examine the determinants of local public health expenditure in a decentralized health system, taking into account the electoral calendar and the effect of central and local elections, besides spatial interaction among municipalities and political alignment. The authors state that the expenditure in public health at the local level is positively influenced by vicinity and by elections calendar.

The authors performed a Spatial Durbin Model with a balanced panel using the data from 399 Brazilian municipalities from 2005 to 2012. The authors use a distance-based spatial matrix, whose choose was based on simplicity and relevance of Moran’s I and Geary’s C coefficients for spatial autocorrelation. The authors also cluster the data in the estimations, according to the distribution of regional facilities in the entire period and considering the occurrence of regionalization in public health services.

The empirical contribution lies in four issues: first, the authors demonstrate a positive spatial effect in the public health expenditure. Second, the estimations show that election-year shifts public spent, as a response for vote-seeking incumbents’ behavior. Third, reelected mayors increase local public health allocations, as well as single candidates and incumbents from the same party of central governments. Finally, populational concentration directly decreases health expenditure (even if those municipalities represent a lower unit cost of acquiring votes, the optimization of public health infrastructure and mobility in achieving public health services negatively affect health spent).

This study supports the statement that public health spent at local level is positively influenced by vicinity and by occurrence of elections.