The Impact of Public Health Expenditures and the Quality of Democracy on Social Welfare in Countries with High Human Development Index

Public health expenditures are one of the important factors in improving health status. Considering the importance of health status in promoting human development indicators and consequently increasing social welfare as well as the impact of institutional and social factors on social welfare status, the main purpose of this study was to investigate the impact of public health expenditures and the quality of democracy on social welfare in countries with high human development index.

This descriptive-analytical and applied study was performed by Panel data with Panel-Corrected Standard Errors (PCSE) estimator for the years 2000-2019 in 2021. The statistical population was 39 countries with a high human development index and the annual time series data were extracted from the databases of the World Bank, the International Country Risk Guide and the United Nations. The models and required tests were estimated in Stata 16 software.

The mean of human development index for all sample countries during the period was 0.70 ± 0.04, for Iran was 0.73 ± 0.04 and the mean of Inequality-adjusted Human Development Index for all sample countries was to 0.58 ± 0.06 and for Iran was equal to 0.56 ± 0.08. The variables of public health expenditures to GDP, GDP logarithm, Openness and democracy index had a positive effect of 0.26, 9.02, 0.08 and 0.17% on the human development index, respectively. Also, the variables of public health expenditures to GDP, Democracy index and the product of public health expenditures to GDP and democracy index had a positive effect of 0.34, 0.09 and 0.15% on the Inequality-adjusted Human Development Index, respectively.

Inequality in human development in Iran was higher than other countries with high human development index, and public health expenditures and the quality of democracy had a positive effect on social welfare. Improving the quality of democracy also increased the efficiency of public health spending on social welfare; therefore, policies to increase public health expenditures are proposed in order to more invest in infrastructure and increase the level of health services in different regions to eliminate inequality, improve and upgrade health technologies that depend on public expenditures. It is also proposed to increase government transparency and accountability to the people in order to increase social welfare and increase the efficiency of health expenditures.