Relevance of corruption on the effect of public health expenditure and taxation on economic growth

ABSTRACT

We investigate whether corruption distorts the positive effect of public health expenditure and taxation on growth through panel data analysis of 75 developing countries for the period from 1995 to 2014. The findings indicate that, although both public health expenditure and taxation can increase economic growth, in countries with more corrupt governments this effect is reduced.

KEYWORDS:

• Corruption
• public health expenditure
• taxation
• economic growth
• developing economies

JEL CLASSIFICATION:

• E62
• D73

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Due to data limitation, an extrapolation based on moving average regarding the variable tax is applied in order to obtain data on the following countries and periods: Kazakhstan (1995–1996); Republic of Congo (1999–2000); Burundi (2000–2002); Dominican Republic (2002–2003); China and Panama (2002–2004); Togo (2003); Paraguay and FYR Macedonia (2003–2004); Laos P.D.R. (2003–2005); Serbia (2004–2006); Botswana (2005); Central African Republic, Colombia, Costa Rica, Rwanda and Turkey (2005–2007); and Bolivia (2008–2010).