Health Care Expenditure, Health Outcomes and Economic Growth in Selected West African Countries: Evidence from Panel Data

Abstract

This study used panel analysis to examine the effects of healthcare expenditure on economic growth in selected West African countries from 1990 to 2024. We outlined three specific objectives in a bid to achieve the broad objective of the study, which include, to examine the effect of healthcare expenditure on economic growth in selected West African countries, to investigate the impact of per capita health expenditure on some selected health outcomes (life expectancy, infant and maternal mortality rates) and to investigate for any causal relationship between health expenditure and economic growth in selected West African countries. Data employed for the study were sourced from the World Bank Databank and World Development Indicators (WDI). The study used the Pooled Mean Group Auto-Regressive Distributed Lag (PMG-ARDL) to estimate the model, given that the annual data used for the model estimations were integrated of order I(1) and I(0). Our ARDL long-run estimation revealed that both healthcare expenditure and life expectancy have positive and significant effects on economic growth. We found no short-run relationship amongst our variables and a uni-directional causality relationship between economic growth and healthcare expenditure. This study establishes that in general, healthcare expenditure has both positive and significant long-run effects on economic growth in West Africa. In view of the above, the study recommends that governments in West Africa should prioritize increases and sustained investments in the healthcare sector as a long-term economic development strategy. Keywords: Health care expenditure, Life expectancy, Infant mortality rate, maternal mortality rate, Economic growth