Do remittances enhance the economic growth effect of private health expenditures in West African Economic and Monetary Union?

Komivi Afawubo (1) , Mawuli Kodjovi Couchoro (2)

1 CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises
2 CERFEG - Centre de Recherche et de Formation en Science Economique et de Gestion

In this paper, we empirically analyze the relationship between private health expenditures and economic growth in West African Economic and Monetary Union (WAEMU), and the extent to which remittances moderate this relationship in a panel of WAEMU countries over the period 2000-2014. We use an endogenous growth model employing Fully Modified Ordinary Least Squares (FMOLS) and Ordinary Least Squares (OLS) methods. Our empirical results show that remittances have a positive and significant effect on economic growth. However, an increase in private health expenditures negatively affects the economic growth rate. Health expenditures may not lead to an increase in the level of human skills and an accumulation of human capital, and this situation decelerates economic growth. Furthermore, the interaction between remittances and private health expenditures has a negative effect on economic growth. These findings can be explained by the fact that the financing of private health expenditure through remittances is insufficient and inefficient and thus does not contribute to improving health status and building up human capital, which would play a part in economic growth.

Domaines: Economies et finances

Komivi Afawubo, Mawuli Kodjovi Couchoro. Do remittances enhance the economic growth effect of private health expenditures in West African Economic and Monetary Union?. Economics Bulletin, 2017, 37 (2), pp.1247-1264. ⟨hal-01716433⟩