The effect of private and public health expenditure on infant mortality rates : does the level of development matter ?

Abstract EN

Does health expenditure reduce infant mortality rates (IMRs)? To answer such important question we, first, disaggregate health expenditure into private and public health expenditures and, second, classify countries into two groups according to their level of development.

Our results, based on different panel data techniques and relatively large sample countries, indicate that to assess the impact of health expenditure it is important to separate the individual effects of public and private health expenditures on IMRs.

They also reveal that these individual effects depend on the level of the development of the country.

Indeed, we find that at low stages of development public health expenditure is more effective in reducing IMRs; whilst at higher levels of development private health expenditure takes the lead in reducing IMRs.

Our results also show that IMRs tend to be lower in countries with good governance, whereas they tend to be higher in countries located inside the tropics