An Assessment of the Marginalizing Impact of Poor Governance on the Efficacy of Public Health Expenditure in LMICS

The multidimensional role of good governance is believed to be central in achieving the development agendas all over the globe. Good governance laid the foundation moving from the Millennium Development Goals (MDGs) to the Sustainable Development Goals (SDGs) agenda which acknowledged the key role of governance in achieving the SDGs by 2030. Moreover, the role of good governance is of even more significance when it comes to health care development merely due to the fact that it ensures effective and efficient utilization of public resources allocated for the health sector in particular. The aim of this paper is to bridge the gap in the empirical literature by analyzing, both theoretically and empirically, the effects of multiple governance indicators on the health attributes across selected lower-middle-income countries across South and Southeast Asia. The paper incorporated relevant annual data from 2000 to 2016 and considered a system of simultaneous equations in which key health indicators were expressed as functions of five crucial indicators of governance. Three-Stage Least Squares (3SLS) panel data estimation tools were used to check the robustness of the findings. The results confirm that most of the governance indicators are effective in influencing the health status in the panel and estimated relationships, more or less, corroborate to the a priori hypotheses which were built in light of economic theories. In addition, the authors also find that poor governance reduces the efficacy of health expenditure in terms of achieving the desired health outcomes. These imply that good governance is a key issue when it comes to public service deliveries, especially in relevance to the health sector. In accordance with the results, it can be expected that promoting good governance within the economy can lead to the attainment of global good health and well-being