Page 129 - GHES-2-4

Global Health Economics and
Sustainability
Fiscal policy shocks and health outcomes

Table 3. Forecast error variance decomposition of health outcomes
Step Central Africa Eastern Africa Southern Africa Western Africa
Fiscal shock Private shock Fiscal shock Private shock Fiscal shock Private shock Fiscal shock Private shock
1 0.019 0.001 0.010 0.004 0.002 0.001 0.002 0.011
2 0.032 0.001 0.012 0.005 0.002 0.004 0.012 0.009
3 0.050 0.001 0.008 0.007 0.002 0.006 0.028 0.008
4 0.065 0.000 0.014 0.005 0.003 0.007 0.043 0.007
5 0.079 0.000 0.012 0.021 0.003 0.010 0.059 0.006
6 0.093 0.002 0.013 0.025 0.003 0.015 0.073 0.004
7 0.107 0.006 0.012 0.024 0.002 0.022 0.087 0.003
8 0.119 0.014 0.011 0.028 0.002 0.030 0.101 0.002
9 0.130 0.023 0.011 0.030 0.002 0.038 0.113 0.002
10 0.140 0.034 0.011 0.031 0.002 0.046 0.125 0.001

effects are rather minute. This may explain why shocks to options beyond the traditional public and private funding
these expenditure types do not necessarily translate to a mechanisms. The study is limited by several factors. First,
significant impact on health outcomes in some regions. the data are used in an aggregated form. This may obscure
In 2001, African governments committed to spending at some salient features of individual countries and, second,
least 15% of their annual national budget on the health the study is restricted to the period when data are available.
sector. However, this target is yet to be met. At present, The period may be expanded as data become available.
SSA countries spend about USD129 per capita on health,
a sharp contrast to the over USD4,000 spent by high- Acknowledgments
income countries (Gatome-Munyua & Olalere, 2020). The author acknowledges the World Bank for access to
Various factors could explain this gap, the most significant data and Chekwube Madichie for providing a data analysis
among them being low GDP and low revenue mobilization guide.
capacity among African countries, compounded by other
competing development priorities. Funding
5. Conclusion None.

Improved health outcomes, an SDG, is critical for achieving Conflict of interest
other SDGs and for boosting economic growth and The author declares no competing interests.
development because a healthy population is needed for a
workforce that drives the economic development process. Author contributions
This study examines the reaction of health outcomes to fiscal
policy and private per capita health expenditure shocks This is a single-authored article.
in SSA. A regional analysis was conducted by sampling Ethics approval and consent to participate
five countries from the Central, Eastern, Southern, and
Western African sub-regions. A panel SVAR model was Not applicable.
used to address the challenge of insufficient time series data
for a single economic unit and accounting for substantial Consent for publication
heterogeneity and cross-dependence. Evidence from the Not applicable.
study is expected to guide policymakers in developing
shock-mitigating health system financing models. Availability of data

This study’s results indicate that while health outcomes The data used for the research are available in the World
are affected by shocks to fiscal policy and private health Bank’s online database.
expenditures in some sub-regions, they appear to be
unaffected by those shocks in other sub-regions. Achieving References
sustainable improvement in health outcomes would Arthur, E., & Oaikhenan, H.E. (2017). The effects of health
require policies designed to expand health financing expenditure on health outcomes in Sub-Saharan Africa.

Volume 2 Issue 4 (2024) 9 https://doi.org/10.36922/ghes.3454