Causality between Public Health Expenditure And Economic Growth In Brics Countries

Background: Inter linkage between factors such as economic growth, public health spending, cost of health care and poverty eradication is significant. Public health expenses in BRICS countries are inadequate and access to public health care system are marred by various socioeconomic conditions. On the flip side, private health care facilities are not affordable to the poor and it mostly leads to out-of-pocket payments. Objective: The purpose of this study is to analyze the causal relationship between per capita public health expenditure and per capita GDP of BRICS countries. Materials and Methods: The study uses annual data of five countries from 1995-2013 and data for the study were obtained from World Bank. Unit root test is employed to check the stationarity of the data for all the five countries and Granger causality test is utilized to test causal relationship between two variables. Durbin-Watson test is used to test Co-integration regression between the variables. Results: The results indicate that there is causality from per capita GDP to per capita public health expenditure while it has not observed any causality from per capita public health expenditure to per capita GDP for BRICS countries. Conclusion: The findings reveal that economic growth is an important factor for the growth of public health expenditure which in turn plays a crucial role in providing better health care facilities for the deprived sections of the society. The policy implication is that government of respective BRICS countries has to increase its budgetary allocation to the health sector for bringing down out-of-pocket payments