Does free-market capitalism drive unequal access to health? An empirical analysis, 1970–2015

ABSTRACT

Many scholars, particularly in public health, argue that neoliberal capitalist economic forces adversely affect communities by increasing inequalities, ultimately affecting health. Apparently, corporate capitalism affects health and communitarian concerns because governments place corporate profits over the publićs interests. Using unique data collected by the Varieties of Democracy (VDEM) project that capture the degree of access of the poorest segments of society to health services comparable with those available to the richest segments, this study finds that an index of economic freedom robustly reduces inequality of access to health. We argue that these results obtain because greater exposure to global markets increases the premium on the productivity of labour, increasing incentives for political elites to invest in productivity-enhancing public goods. Our results are robust to a number of alternative models and data, and robust to instrumental variables analyses addressing potential endogeneity. Rather than free-market capitalism increasing health-related neglect of society, our data suggest that free-market capitalist conditions promote equitable access to health. This is good news for governments wishing to grow their economies, reform broken health systems for gaining advantages in a competitive global economy, and serve communitarian interests, such as shared good health.

KEYWORDS:

• Free-market capitalism
• healthcare equity
• global competition
• human capital

Acknowledgements

We wish to thank the editor and three anonymous reviewers for unusually constructive comments and suggestions. We are grateful to members of the CHAIN research group at the Institute for Sociology and Political Science at the Norwegian University of Science and Technology (NTNU), especially Courtney McNamara and Oda Nordheim, who provided useful comments and suggestions on an earlier draft. We are also grateful to Paul Walsh and Aidan Regan for providing valuable feedback. Only we are responsible for the way in which we have used all this good advice.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Equality of access (or increasing opportunities broadly) might not necessarily benefit only the poorer classes in terms of outcomes, because the rich are better placed already to take advantage of increased opportunity, which may in fact increase outcome-based inequalities. As an example, suppose a factory owner gets increased access to healthier workers, the factory owner can increase her riches even as workers see increased opportunity. For a discussion of the philosophical underpinnings of the equality of opportunity over outcome, see Roemer (2012). On Several Approaches to the Equality of Opportunity. Economics and Philosophy, 28, 165-200.

2 The theory becomes somewhat complicated when one separates the differential effects of skilled versus unskilled labour in the rich- and poor-country settings. One can expect, however, that skilled labour wins in rich countries and the unskilled lose, whereas in poor countries the basic endowment is made up largely of unskilled workers.

3 See: https://www.v-dem.net/en/data/data-version-10/

4 In robustness tests, we also compare our results with the 5-year gaps interpolated between 1970 and 2000.

5 The online appendix may be accessed at: http://folk.ntnu.no/indras/publishedarticles.html.