Autoregressive Distributed Lag (ARDL) Analysis of the Relationship Between Public Health Expenditure and Economic Growth in Benin

Abstract

Aims/ Objectives: To examine the impact of public health expenditure on economic growth in Benin. Study Design: Autoregressive Distributed Lag (ARDL) model analysis approach. Place and Duration of Study: E´ cole Nationale de Statistique, de Planification et de De´mographie (ENSPD), Universit ´e de Parakou, Benin, between January and April 2024. Methodology: This research utilizes data from the World Bank’s World Development Indicators (WDI) database, covering the period from 1977 to 2017. The method used is the Autoregressive Distributed Lag (ARDL) model analysis approach with tree models. The study adopts the human capital production function from Romer (1990) as a base model, which is modified to account for factors influencing the total productivity of the factors, following Romon’s (1998) approach. Results: The associated balance correction was negative and significant for each model, confirming the existence of long-term relationships. The results of the study also reveal that public health expenditure has a negative long-term and positive short-term impact on economic growth in Benin. Moreover, life expectancy at birth, in turn, has a positive effect on economic growth in the short and long term. Furthermore, Benin’s policy of openness to the outside world and the inflation rate has a negative impact in the short and long term on economic growth. Conclusion: The results of the selected model indicate that public health spending has a positive impact on economic growth in Benin in the short term, while its effect is negative in the long term.