PUBLIC HEALTH EXPENDITURE AND INCLUSIVE GROWTH IN NIGERIA

Abstract

Knowledge of public health expenditure in Nigeria is required to fashion outpolicies aimed at
promoting inclusive growth. The objective of this paper is to examine the relationship between
public health expenditure and inclusive growth in Nigeria. Studies done in this area did not used
estimation techniques that have wide implications and the distributional effect of fiscal policy
was also not considered. This current study departs from these by using error correction
technique that shows how the disequilibria in the previous year is corrected for in the current
year and enclosure of gini-difference variable into the analysis to capture the distributional
effects of fiscal policy. Public health expenditure on health was used as a proxy for health
expenditure, while inequality proxied by gini-difference was used as the dependent variables
whileother variables were used to control for gini-difference. Stochastic properties of the time
series data were carried out such as descriptive statistics, correlation matrix, stationarity test,
lag length selection criteria to inform the econometrics technique and procedures. Error
correction model was built and estimated to examine this relationship. To validate the model,
diagnosed tests such as serial correlation - LM test, CUSUM test and CUSUM of Square tests
and Wald test for coefficient diagnostic wasused. The result of the error correction term portrays
that about 21.5% disequilibrium from the previous year’s shock converges back to the long-run
equilibrium in the current year. The government should improve on it health expenditure if
inclusive growth from the point of view of health expenditure is to be achieved.