Relationship between Health and Economic Growth in Sub-Saharan African Countries: Examining the Moderating Effect of Institutional Quality
DOI:
https://doi.org/10.62054/ijdm/0302.19Abstract
This study investigates health-growth relationship with the moderating effect of institutional quality (control of corruption) in Sub-Saharan African countries from 2000 to 2022. Utilizing Driscoll-Kraay fixed effect regression with standard errors, the analysis addresses autocorrelation, heteroskedasticity and cross-sectional dependence. Empirical results highlight that while school enrolment and life expectancy positively impact GDP per capita, control of corruption does not have a significant direct effect. Gross fixed capital formation shows a minor negative effect, and labour force participation has a small yet significant negative impact. The interaction between health improvements and institutional quality reveals that higher life expectancy significantly boosts economic growth, especially when corruption is reduced. The study underscores the crucial role of control of corruption on health improvements and economic growth. Strong institutions are important in converting health improvements into sustainable economic benefits, indicating that improving institutional quality can amplify the positive impacts of health on economic growth. The findings emphasize the importance of addressing institutional weaknesses to fully realize the benefits of health investments in the region. These insights are crucial for policymakers aiming to foster economic growth through investments in health human capital and institutional reforms in Sub-Saharan Africa.
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