When Social and Economic Goals Meet: The Double Dividend of Improving Farmers’ Health Capital in Uganda

Abstract

Focusing on the relationship between farmers’ health and agricultural productivity, we explore the potential effects of improving the current health care fee policy in Uganda. Using a microsimulated general equilibrium model, we show that alternative health fee reduction strategies might increase the chances of achieving simultaneous growth, poverty reduction and improved access to health for households while maximising the public spending effectiveness. However, these results seem very sensitive to the potential disruptive effects on public facilities that such a policy might generate so they must be contextualised within a broader perspective on the health system’s efficiency.

Acknowledgements

We are grateful to the reviewers and editors of the Journal of Development Studies for helpful comments. The data and code for this article will be made available upon request.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. This abolition was simultaneous with several other changes in the health sector, such as decentralising responsibility for the delivery of services to local authorities, restructuring the Ministry of Health, introducing the Uganda National Minimum Health Care Package, granting autonomy to National Medical Stores, initiating community health insurance schemes, contracting with health workers and establishing hospitals’ autonomy.

2. In this effort, we follow Nabyonga et al. (2013), who underline that the issue of payments is not in the public sector alone and has to encompass the private sector as well.

3. We present the relevant equations and variables of the model in Online Appendix A.

4. The gap observed for Uganda in 2008 was −20 per cent.

5. This unemployment closure does not reflect the complexity of the urban unskilled labour market in Uganda perfectly, where informality and underemployment prevail. We might have introduced an urban, informal sector but chose not to do so, to ensure consistency with the database used to calibrate the CGE model, which does not distinguish informal activities. Another alternative would be to consider full employment. Again though, we sought to be more consistent with the official statistics, which exhibit unemployment for Uganda (ILO & MGSLD, 2012; MGSLD, 2006), even if the official unemployment rate is relatively low.

6. We lack data to specify this elasticity and assume all households substitute private health consumption for public consumption with the same elasticity. This assumption limits our analysis and cannot account for distinct behaviours across households. However, income elasticity parameters for health products are chosen lower for rural households than for urban households.

7. The public and PNFP facilities are well distributed geographically across Ugandan districts and sub-districts, so we assume it is possible to find different fees between rural and urban areas.

8. For details on the econometric model and our estimation strategy, see Online Appendix B.

9. More detailed results are available in Online Appendix C.

10. More detailed results are available in Online Appendix C.

11. More detailed results are available in Online Appendix D.