Fiscal Dividend from Saving, Investment and Per Capita Income Growth in Sub-Saharan Africa: Panel Data Analysis

Abstract Background This commentary assesses critically the published article in the Health Economics Review. 2020; 10 (1), 1–9. It explains the effects of health expenditure on infant mortality in sub-Saharan Africa using a panel data analysis (i.e. random effects) over the year 2000–2015 extracted from the World Bank Development Indicators. The paper is well written and deserve careful attention. Main text The main reasons for inaccurate estimates observed in this paper are due to endogeneity issue with random effects panel estimators. It occurs when two or more variables simultaneously affect/cause each other. In this paper, the presence of endogeneity bias (i.e. education, health, health care expenditures and real GDP per capita variables) and its omitted variable bias leads to inaccurate estimates and conclusion. Random effects model require strict exogeneity of regressors. Moreover, frequentist/classic estimation (i.e. random effects) relies on sampling size and likelihood of the data in a specified model without considering other kinds of uncertainty. Conclusion This comment argues future studies on health expenditures versus health outcomes (i.e. infant, under-five and neonates mortality) to use either dynamic panel (i.e. system Generalized Method of Moments, GMM) to control endogeneity issues among health (infant or neonates mortality), GDP per capita, education and health expenditures variables or adopting Bayesian framework to adjust uncertainty (i.e. confounding, measurement errors and endogeneity of variables) within a range of probability distribution.

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Impact of Corruption on Per-Capita Income Growth: A Meta-Analysis

SSRN Electronic Journal ◽

10.2139/ssrn.2102780 ◽

2012 ◽

Author(s):

Mehmet Ugur

Keyword(s):

Capita Income ◽

Meta Analysis ◽

Income Growth ◽

Per Capita Income ◽

Per Capita ◽

Capita Income Growth

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Economic freedom and tax revenue performance in sub-Saharan Africa

Journal of Financial Reporting and Accounting ◽

10.1108/jfra-04-2017-0024 ◽

2018 ◽

Vol 16 (4) ◽

pp. 610-638 ◽

Cited By ~ 2

Author(s):

James Oladapo Alabede

Keyword(s):

Capita Income ◽

Economic Freedom ◽

Sub Saharan Africa ◽

Tax Revenue ◽

Traditional Theory ◽

Per Capita Income ◽

Content Type ◽

Tax Effort ◽

Per Capita ◽

Sub Saharan

Purpose This study aims to expand the conventional tax effort model to incorporate relevant economic freedom variables to investigate whether economic freedom fosters tax revenue performance in `sub-Saharan Africa (SSA). Design/methodology/approach This study uses data from 42 countries across the four sub-regions of SSA from the period 2005 to 2012 with 252 year-country observations in an unbalanced panel method. The data were statistically treated using feasible generalised least square (FGLS) and panel-corrected standard errors (PCSE) estimate techniques. Findings The findings are twofold. First, the principal finding of the study suggests that economic freedom promotes tax revenue performance. Precisely, the FGLS analysis indicates that property rights freedom, freedom from corruption and investment freedom, as well as the composite economic freedom, exerted positive significant impact on tax revenue performance. This implies that country, which attained high degree of economic freedom, is likely to have higher tax-to-GDP ratio than a country with low level of economic freedom. Secondly, the results of most conventional variables conform to the prediction in the traditional theory except per capita income. Specifically, agriculture share in GDP and per capita income indicate negative significant relationship with tax revenue performance. Originality/value Because little is known empirically about the connection between economic freedom and tax revenue performance, this study extended the conventional tax effort model to incorporate the economic freedom to bridge the knowledge gap due to the absence of empirical evidence on the relationship between economic freedom and tax effort.

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