Impact of Health Expenditure on Achieving the Health-related MDGs

This paper analyses the effect of public and private health expenditures on the achievement of health-related MDGs. It finds that three quarters of the variation of health-related MDG indicators can be explained by public and private health expenditure per capita when controlling for levels of income and demographic factors such as age dependency ratio, urbanization and population density. In addition, the analysis finds that marginal gain in health performance is higher for countries with low per capita public health expenditures. The paper also estimates country’s potential for increasing health expenditure and suggests that some of the countries that are behind in their progress towards the achievement of the MDGs have the potential to complement the shortfall through increasing their public health expenditure to levels that are compatible with their per capita income and demographic structure.