A Comparative Study of the Impact of Governance Sub-Indicators on Health Expenditures in Rich and Poor Countries

Health is one of the main indicators of development in any country, and investing in this sector has a direct impact on the welfare of society and economic growth. The lack and insufficiency in providing health services is considered as a sign of government weakness. Therefore, it is very important to examine the performance of governments in the health sector.

The present research has investigated the effect of governance sub-indicators on health costs for two groups of low-income and high-income countries. To conduct this research, a balanced mixed data model was used. The total health cost was used as a dependent variable and the governance sub-indicators including six sub-indicators were used as independent variables and the human development index was used as a control variable. We used Eviews10 software to perform calculations.

The findings of the research in the group of low-income countries confirmed the effect of the following governance indicators on health costs. In addition, all the coefficients of the variables in the high-income group were significant at the 90% confidence level, which means that the better the governance index, the higher the health costs appear to be. The model used in the research also had a suitable fitness.  

Arguing based on the results of the research, it is recommended to the governance system of low-income countries that have weak governance to reduce political instability and reduce restrictive laws. In addition, removing trade barriers and creating a competitive environment in these countries is a key and inevitable issue.