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A bullet a day keeps the doctor away: the effect of war over health expenditure 
RITA ABDELSATER& MARIAJOSEOSPINA FADUL, 2...
0 
204060 
80 
100 
120 
140Average Domestic per Capita Health Expenditure ( at average exchange rate)
Introduction 
•Ourarticleexaminesifconflictaffectstheoveralllevelofhealthcareexpenditureanditscomposition,aswewouldexpectc...
Theoretical Framework 1H1:Incountriesexposedtohighintensityofconflict,warspellsdecreaseoveralldomesticHealthExpenditurebut...
Theoretical Framework 2H2:Governmenthealthexpenditureaspercentageoftotalhealthexpendituredecreaseswhenthecountryisexposedt...
MethodsData 
1.Information on conflict for every country from the Peace Research Institute Oslo (PRIO): conflicts of low i...
Methods 
War spells 
• Two or more consecutive years with a registration of conflict 
• Recodification of the war register...
Methods 
Sample and intensity classification 
0 
.5 
1 
1.5 
0 2 
.5 
1 
1.5 
0 2 
.5 
1 
1.5 
2 
1990 1995 2000 2005 2010...
Overall levels of health expenditureStatisticalmodel2MethodsPer capita government health expenditure (current US) Per capi...
Changes in the composition of the health expenditure and percentage within the public budgetStatisticalmodel2MethodsGovern...
ResultsEstimationissues 
•Fixedvs.RandomEffects:Hausmantest(p<0.05forallmodels) 
•Presenceofserialautocorrelationoffirstor...
Results: overall levels of expenditure 
Per capita health expenditure 
Per capita government health expenditure 
Pc health...
Results: percentages and composition 
VARIABLES 
GHE/ THE 
GHE/ TGE 
GHE/ THE(lag instrumented) 
0.391*** 
GHE/ TGE(lag in...
•High-intensity:NoapparenteffectonTHE,GHEPHENoapparenteffectonGHE/TGENocrowdingouteffect TotalGovernmentExpenditure 
•L...
•Measurementofwar 
•Civilconflicts→clearendingdate?comparisonofconflictsacrosscountries? 
•Relativelylargesampleandapplyin...
Conclusions and further developments 
•Ourempiricalfindingsdisagreewithourhypothesis;neverthelesstheydoshowachangeinthepat...
Chen S., LoayzaN., Reynal-QuerolM. (2008), The Aftermath of war,World Bank Economic Review,2008 
CollierP.,HoefflerA.,(200...
Gupta, J., Clemens, B., Bhattacharya, R., ChakravartiS., (2002), Fiscal Consequences of Armed Conflict and Terrorism in Lo...
A bullet a day keeps the doctor away: the effect of war over health expenditure
A bullet a day keeps the doctor away: the effect of war over health expenditure
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A bullet a day keeps the doctor away: the effect of war over health expenditure

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Barcelona GSE Master Project by Rita Abdel Sater and María José Ospina Fadul

Master Program: Health Economics and Finance

About Barcelona GSE master programs: http://j.mp/MastersBarcelonaGSE

Published in: Economy & Finance
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A bullet a day keeps the doctor away: the effect of war over health expenditure

  1. 1. A bullet a day keeps the doctor away: the effect of war over health expenditure RITA ABDELSATER& MARIAJOSEOSPINA FADUL, 2014
  2. 2. 0 204060 80 100 120 140Average Domestic per Capita Health Expenditure ( at average exchange rate)
  3. 3. Introduction •Ourarticleexaminesifconflictaffectstheoveralllevelofhealthcareexpenditureanditscomposition,aswewouldexpectchangesinthebehaviorofthemainfundersofhealth(publicandprivatesectoraswellasthirdparties),andexaminewhetherthiseffectisdifferentwithdifferentintensitiesofwar.
  4. 4. Theoretical Framework 1H1:Incountriesexposedtohighintensityofconflict,warspellsdecreaseoveralldomesticHealthExpenditurebutthiswillnothappencountrieswithalowintensityofconflict. •EconomicGrowthandGDP Privatesector:increaseduncertaintyandchaosinhibitsinvestmentsandthereisrelocationofmostproductivefacilities. Publicsector:erosionofthetaxbaseand,additionally,duetoadecreaseintheefficiencyoftaxadministrationthatiscausedbythepoliticaldistress. •Humanandfixedcapitalofthehealthsystem •BUTalthoughtheeffectoneconomicgrowthandactivitywouldstillbepersistentinmildwarsbecauseoftheincreaseduncertaintyandinstabilityinthecountry,thedestructiveeffectwouldbesomewhatabsentandpublicspendingmaystillbeabletocompensatethedecrease.
  5. 5. Theoretical Framework 2H2:Governmenthealthexpenditureaspercentageoftotalhealthexpendituredecreaseswhenthecountryisexposedtoawar,incountrieswithbothinhighandlowintensityofconflict,buttheeffectislowerinthecaseofthelatter •Crowdingouteffectwithinthepublicbudget-Increaseinmilitaryandsecurityexpenditure(nearly2%) -10%increaseintheriskofconflict0.4%increaseinmilitaryspending •Crowdingouteffectsofthepublicresourcesbythirdparties: -Bytheprivatesector-ByForeignAid$1ofaid$0·46decreaseingovernmenthealthexpenditure
  6. 6. MethodsData 1.Information on conflict for every country from the Peace Research Institute Oslo (PRIO): conflicts of low intensity (less than 1000 fatal victims) and high intensity (more than 1000 fatal victims) from 1946 until 2008. 2.Data for health expenditure and its composition was obtained from the WHO, as reported in the National Health Accounts from 1995 to 2011. 3.Data on Gross Domestic Product (GDP) per capita was obtained from the World Bank for the same period of time. 4.Intersection of available data: from 1995 to 2008
  7. 7. Methods War spells • Two or more consecutive years with a registration of conflict • Recodification of the war registers for smooth war spells (started from 1992) 0 .5 1 1995 2000 2005 2010 congo Conflict Report year Graphs by Country 0 .5 1 1995 2000 2005 2010 congo Warspell Recode year Graphs by Country
  8. 8. Methods Sample and intensity classification 0 .5 1 1.5 0 2 .5 1 1.5 0 2 .5 1 1.5 2 1990 1995 2000 2005 20101990 1995 2000 2005 2010 1990 1995 2000 2005 2010 Congo Eritrea Indonesia Nepal Rwanda Senegal Sierra Leone Type of war Year Graphs by Country 0 .5 1 1.5 0 2 .5 1 1.5 0 2 .5 1 1.5 0 2 .5 1 1.5 2 1990 1995 2000 2005 2010 1990 1995 2000 2005 2010 1990 1995 2000 2005 2010 1990 1995 2000 2005 2010 1990 1995 2000 2005 2010 C?te d'Ivoire Cambodia Central African Republic Croatia Djibouti Egypt Georgia Guatemala Guinea Guinea-Bissau Iraq Liberia Niger Pakistan Papua New Guinea Peru Somalia Tajikistan Thailand Uzbekistan Type of war Year Graphs by Country High-Intensity Cluster Low-Intensity Cluster
  9. 9. Overall levels of health expenditureStatisticalmodel2MethodsPer capita government health expenditure (current US) Per capita domestic health expenditure (current US)
  10. 10. Changes in the composition of the health expenditure and percentage within the public budgetStatisticalmodel2MethodsGovernment health expenditure as % of total health expenditureGovernment health expenditure as % of total government expenditure
  11. 11. ResultsEstimationissues •Fixedvs.RandomEffects:Hausmantest(p<0.05forallmodels) •Presenceofserialautocorrelationoffirstorder:Wooldrigdetest(p<0.05forallmodels) •ArellanoBondGMMestimator,robusttoheterosckedasticity
  12. 12. Results: overall levels of expenditure Per capita health expenditure Per capita government health expenditure Pc health expenditure (lag instrumented) 0.563*** Pc government health expenditure (lag instrumented) 0.737*** GDP per capita lag 0.0434*** 0.0357*** Foreign aid for health lag -0.045 -0.808 War (High Intensity Cluster) 3.288 6.712* War (Low Intensity Cluster) -5.290** -1.223 Constant -17.48*** -22.88**
  13. 13. Results: percentages and composition VARIABLES GHE/ THE GHE/ TGE GHE/ THE(lag instrumented) 0.391*** GHE/ TGE(lag instrumented) 0.520*** GDP per capita lag -0.023 -0.0126 Foreign aid for health lag 3.975* 1.199* War (High Intensity Cluster) -1.76 -1.039 War (Low Intensity Cluster) -0.148 -0.731** Constant 0.519 -2.707
  14. 14. •High-intensity:NoapparenteffectonTHE,GHEPHENoapparenteffectonGHE/TGENocrowdingouteffect TotalGovernmentExpenditure •Low-intensity:THE,noapparenteffectonGHEPHEGHE/TGEcrowdingouteffect TGE Discussion
  15. 15. •Measurementofwar •Civilconflicts→clearendingdate?comparisonofconflictsacrosscountries? •Relativelylargesampleandapplyingclustering Main limitations
  16. 16. Conclusions and further developments •Ourempiricalfindingsdisagreewithourhypothesis;neverthelesstheydoshowachangeinthepatternsofhealthexpenditure. •Incountrieswithlowintensityofconflict: Adisruptioninthegrowthofhealthexpenditure+longtermseffectsofthesekindofwarsonpublichealth=increasednegativeeffectoverhealthstatus •Forfutureassessments: TypeofwarLingeringeffectTimeseries
  17. 17. Chen S., LoayzaN., Reynal-QuerolM. (2008), The Aftermath of war,World Bank Economic Review,2008 CollierP.,HoefflerA.,(2002),MilitaryExpenditure:Threats,AidandArmsRaces,WorldBankPolicyResearchWorkingPaper2927,November2002 DayK.andTousignantJ.(2005),HealthSpending,HealthOutcomes,andPerCapitaIncomeinCanada:ADynamicAnalysis,WorkingPaper2005- 07,CanadaMinistryofFinance,June2005. Devarajan,Shantayanan;Miller,MargaretJ.;Swanson,EricV.(2002).GoalsforDevelopment:History,Prospects,andCosts.WorldBank, Washington,D.C..WorldBank. Easterbrook, P. (1990), The Health Impact of "Low Intensity Conflict, Journal of Public Health Policy, Vol. 11, No. 3 (Autumn, 1990), pp. 277-280 Edwards,SebastianandGuidoTabellini(1991)ExplainingFiscalPoliciesandInflationinDevelopingCountries.JournalofInternationalMoneyandFinance,vol.10. Evans,DavidB.,AjayTandon,ChristopherJ.L.Murray,andJeremyA.Lauder,(2002)TheComparativeEfficiencyofNationalHealthSystemsinProducingHealth:AnAnalysisof191Countries,GPEDiscussionPaperNo.29.Geneva:WorldHealthOrganization. Fearson,J.(2002)WhyDoSomeCivilWarsLastSoMuchLongerThanOthers?DepartmentofPoliticalScience,StanfordUniversity,CA94305-2044, July12,2002 Ghobarah,H.,P.Huth,andB.Russett.(2002),ThePost-WarEffectsofCivilConflict,inAlexMintzandBruceRussetteds.,NewDirectionsforInternationalRelations(Lanham,MD:LexingtonBooks GrundyJ.,LeslieP.andMihrshahiS.(2008),“BalancingNationalSecuritywithHumanSecurity–ACallforComprehensivePre-EventPublicHealthAnalysisofWarandDefencePolicy”,JournalofPeace,ConflictandDevelopment,Issue12,May.
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