Exploring the relationship between health and economic growth of developing and wealthy nations

Abstract

This study examines the striking paradox that exists between healthcare and economic growth of developing and wealthy nations. On one side there is the thought that nations with greater wealth or higher Gross domestic product (GDP) will lead to improved health within its nation, while countries with less GDP will have poorer health conditions. On the other side of the paradigm is the thought that more healthy nations will elicit greater economic growth or higher GDP’s in its country, while less healthy nations will elicit poorer economic growth. To explore this relationship further a theoretical and literature review was conducted to develop a foundation of the current body of knowledge related to this paradox. Of particular note were the findings of Preston and the development of the Preston curve, which illustrated that countries with higher GDP per capita tended to have a corresponding increase in life expectancy. These finding spurred on the current study which used simple linear regression models to examine the role of various health expenditure variables on health indicators (life expectancy at birth and infant mortality rate) for both developing and wealthy nations. The results of this study indicated that when all nations are considered together the percentage of government spending on health care was the strongest predictor for the health of a nation. There were other expenditure variables that elicited strong correlations with the health indicator metrics such as: the per-capita government spending on health and the number of doctors per 10 000 population. Although these results only touch the surface of the role of health expenditure on the health of a population they do highlight the importance of the increased funding to health services by governments in developing countries. As healthier populations experience increased productivity of labor resources thus improving the economic growth of the nation. These extrapolations are very rudimentary as they do not take into account the population size of the country and the current focus of health funding by the governments. More research will need to be done to examine more thoroughly the role that government funding in health care plays in the economic growth of a country.