The effect of the quality of institutions on the relationship between public health expenditure and the infant mortality rate: evidence from the PVAR (X) and PSTR approaches

Abstract

Infant mortality is a major health problem in developing countries. It is an important indicator of a country's public health as it goes hand in hand with socio-economic conditions and many others. Public health spending has been committed to reducing this scourge. This has led to the completion of numerous studies which have yielded mixed results. The main objective of this study is to test the effect of public health expenditure (% GDP) on the infant mortality rate, taking into account the role that institutional quality can play. To achieve this, we use two approaches which are the autoregressive vector panel model with exogenous variables (PVAR (X)) and the smooth threshold regression model (PSTR) on annual data covering the period 2002-2016 and covering 37 African countries. Sub-Saharan. Our main results through the PVAR (X) reveal that in the absence of institutional variables, public health expenditure has a negative and significant effect on the infant mortality rate, whereas, in the presence of the various institutional variables, this effect is still negative but is no longer significant. Our results show that the presence of institutions halves the weight of public health expenditure in explaining the infant mortality rate. In addition, our results show through the PSTR that there is a certain level of institutional qualities that these countries must achieve for public health expenditure to positively affect infant mortality rates. These thresholds oscillate for all the institutional variables around 7%. Taking institutional variables into account will help reduce infant mortality in Sub-Saharan African countries.