Waste Not, Want Not: The Efficiency of Health Expenditure in Emerging and Developing Economies

Author/Editor:

Francesco Grigoli ; Javier Kapsoli

Publication Date:

August 28, 2013

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Public health spending is low in emerging and developing economies relative to advanced economies and health outputs and outcomes need to be substantially improved. Simply increasing public expenditure in the health sector, however, may not significantly affect health outcomes if the efficiency of this spending is low. This paper quantifies the inefficiency of public health expenditure and the associated potential gains for emerging and developing economies using a stochastic frontier model that controls for the socioeconomic determinants of health, and provides country-specific estimates. The results suggest that African economies have the lowest efficiency. At current spending levels, they could boost life expectancy up to about five years if they followed best practices.

Series:

Working Paper No. 2013/187

Subject:

Expenditure Expenditure efficiency Foreign exchange Health Health care spending Purchasing power parity

English

Publication Date:

August 28, 2013

ISBN/ISSN:

9781484364260/1018-5941

Stock No:

WPIEA2013187

Pages:

26

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