The effects of domestic and international health expenditure on health and use of health care

Abstract: 

Evidence on whether public health expenditure improves population health is mixed and is particularly scarce from low-income countries. Studies often fail to account for the subnational distribution of expenditure and rarely distinguish between different sources and forms of governance over funding.

We assess the effects of three forms of health expenditure on multiple health and use of health care outcomes across 121 districts in Mozambique. We generated a unique dataset covering 2008 to 2015 by linking three data sources through geolocation: individual health outcomes; domestic recurrent health expenditure; and international health expenditure (channelled through provincial governments or earmarked projects). We relate expenditure to outcomes using linear regression controlling for household and mother characteristics and district and year fixed effects.

Domestic expenditure increased child survival and the probability of giving birth in a health facility. International health expenditure through provincial governments improved child survival,  reduced infant anaemia, and increased antenatal care visits with skilled professionals. International earmarked projects had a significant positive effect only on the skilled provision of antenatal care.

Results show that domestic expenditure is critical for child health. International expenditure has more positive impacts when it is managed by local governments through sustainable and predictable funding schemes.