Linking Health Budgets to Economic Development

Abstract

In this study, we explore the relationship between public health expenditures and economic performance of 22 countries. Healthcare spending can lead to better health opportunities which can strengthen human capital and increase productivity, contributing to economic growth. Therefore, it is important to evaluate the phenomenon of healthcare spending in a country. We collected economic and health data of 22 countries from the World Bank database. The time period of the data is from the year 2000-18. Using visual analytics, the overall results strongly suggest a positive correlation between GDP per-capita (current US$) and Current health expenditure per-capita (current US$). Also, the research shows that there is negative correlation between Out-of-pocket expenditure and current health expenditure. The result of Multiple Linear Regression shows that Current Health Expenditure per-capita and Domestic general government health expenditure per-capita (current US$) has a positive and significant impact on the GDP per-capita of any country. As a result, making investments in healthcare by the government would boost income, GDP and productivity, as well as alleviate poverty. Considering these potential benefits, universal healthcare deserves additional research.