Addressing the Fiscal Costs of Population Aging in Latin America and the Caribbean, with Lessons from Advanced Countries

This paper presents projections for 18 Latin America and Caribbean countries of pensions and health expenditures over the next 50 years, compares them to advanced countries, and calculates estimates of the fiscal gap due to aging. The exercise is crucial since life expectancy is increasing and fertility rates are declining in virtually all advanced countries and many developing countries, but more so in Latin America and the Caribbean. While the populations of many of the regions countries are still relatively young, they are aging more rapidly than those in more developed countries. The fiscal implications of these demographic trends are severe. The paper proposes policy and institutional reforms that could begin to be implemented immediately and that could help moderate these trends in light of relevant international experience to date. It suggests that LAC countries need to include an intertemporal numerical fiscal limit or rule to the continuous increase in aging spending while covering the needs of the more vulnerable. They should consider also complementing public pensions with voluntary contribution mechanisms supported by tax incentives, such as those used in Australia, New Zealand (Kiwi Saver), and the United States (401k). In addition, LAC countries face an urgent challenge in curbing the growth of health care costs, while improving the quality of care. Efforts should focus on improving both the allocative and the technical efficiency of public health spending.

Spatial Spillover Effect of Government Public Health Spending on Regional Economic Growth during the COVID-19 Pandemic: An Evidence from China

The COVID-19 pandemic, which was first reported at the end of 2019, has had a massive impact on the Chinese economy and society. The pandemic has seriously tested the emergency management capabilities of the Chinese government regarding public health. Based on the panel data of 31 provinces in China for the period of 2006–2019, this paper examines the impacts of government public health spending on regional economic growth. Furthermore, the possibility of spatial spillover effects of government public health spending is investigated through spatial econometric analysis. Government public health spending and regional economic growth have significant positive spatial correlation and spatial agglomeration effects. The indicator of government public health spending significantly promotes regional economic growth. In addition, it significantly promotes the economic growth of neighboring areas through certain spatial spillovers.

Why Asian Countries are Controlling the Pandemic Better Than the United States and Western Europe

The coronavirus pandemic has shed light on the detrimental impact of neoliberal policies on public health and well-being and as a result, there have been calls for increases in public spending to rectify the lack of public health services. However, neoliberal right-wing parties have dismissed such calls, pointing instead to Asian countries as examples in successfully controlling the pandemic without high public health spending, attributing this to the entrepreneurial orientation of their governments, as opposed to their public services. This article refutes this idea, instead charting the reasons that Asian countries have better controlled the pandemic including prior experience of pandemics, cultural factors, and various successful public health policies. The article concludes by looking at the example of Trump and demonstrating the inadequacies of the business model for dealing with the coronavirus pandemic.

The role of governance in the health expenditure–health outcomes nexus: insights from West Africa

PurposeDespite the global attempt at achieving goal 3 of the Sustainable Development Goals by improving health outcomes, some countries (West African countries inclusive) still do not spend a significant proportion of their income on health and they exhibit health outcomes that are still far below that of developed countries. Besides countries like Nigeria, Chad and Guinea-Bissau are experiencing worsening insecurity and political instability. This study, therefore, examines the effect of health expenditure on three health outcomes in the West African sub-region, while investigating the effect of the quality of governance in this nexus.Design/methodology/approachThis study conducts an instrumental variable approach (two-stage least squares regression) on a panel of 15 West African countries over the period 2000–2018. This study uses three proxies to measure health outcomes and six measures of the quality of governance were also considered.FindingsThe result of this study shows that all forms of health expenditures significantly influenced health outcomes. That is, there is a negative relationship between health expenditure, infant mortality and under-five mortality, but a positive relationship between health expenditure and life expectancy at birth. Besides, the general effect of the same quantity of public health spending is subject to the quality of governance because countries with a higher quality of governance benefit better from their public health spending.Originality/valueThis study, to the authors' knowledge, is the first empirical attempt to examine the role of governance in the health expenditure-health outcomes nexus in 15 ECOWAS countries, using different measures of health outcomes and governance.

Public Health Spending, Governance Quality and Poverty Alleviation

Poverty alleviation has become the main priority program in most developing countries. This research empirically studies the correlation between public health spending, governance quality, and poverty alleviation in developing countries. The panel data were estimated via a random-effects (RE) model and robustness check using instrumental variables (IV) (two-stage least-squares [2SLS]) and first-difference generalized method of moments (GMM) because of the endogeneity problem. The results suggest that public health spending has a significant effect on reducing the poverty rate, and that countries with better governance tend to reduce poverty than countries with poor governance. Increasing public health spending by one percentage point may reduce poverty by 0.48 percentage points in countries with good governance supposing the governance quality influences public health spending. Conversely, in countries with poor governance, the poverty headcount ratio may decline by 1.375 percentage points when public health spending increases by one percentage point.