Public health financing as a driver of economic growth and equity: Evidence from Morocco

Abstract

This paper analyzes the economic growth and health financing in Morocco in connection with the importance of health investment to sustainable economic growth. The available literature indicates that the enhancement of population health is one of the factors that help an economy to improve, especially when governments decide to allocate more funds to the health sector and also enhancing access to health care services. A healthier population is also likely to be more productive which will improve labor efficiency, decrease absenteeism and boost the economy eventually. To investigate these relationships, this study employs the Autoregressive Distributed Lag (ARDL) bounds testing approach, which is particularly suitable for small-sample time-series data with variables integrated of mixed orders I (0) and I (1). The econometric framework combines unit root testing, cointegration analysis, long-run estimation, and error correction modelling to examine both the short-run and long-run effects of public health financing on economic growth and maternal health outcomes in Morocco over the period 1980–2015. The empirical findings reveal that increased public health financing significantly promotes economic growth while reducing maternal mortality. Furthermore, the results indicate that public health expenditure mitigates the adverse effects of income inequality on health outcomes, highlighting the importance of sustained public investment in healthcare for achieving inclusive and sustainable development. There are multiple indicators that are associated with economic performance, income distribution, and health outcomes which are taken into account to reflect the multidimensional character of the relationship between economic growth and health investment. The empirical evidence indicates that greater public health financing is related with improvements in health outcomes especially with decreases in the maternal and infant demise rates. Besides, the results indicate that inequality in the distribution of income and the policies on health investment is positively related to economic development and social well-being in Morocco.