Public Health Expenditure and Infant Mortality in Uganda: Does Governance Matter?

Abstract

The purpose of this study is to investigate the role played by governance in affecting the relationship between public health expenditure and infant mortality in Uganda from 1999 to 2014. Using quarterly data, the study looked at public health expenditure in three forms namely; budgetary allocations, government releases and outturns. The KPSS unit root test found that all variables are integrated of order one, I (1) while the Johansen cointegration test found a long run relationship between infant mortality rate and explanatory variables. The study then employed the Vector Error Correction Model in carrying out the estimations. To capture the effect of governance on the relationship between public health expenditure infant mortality, we interacted governance with allocations, releases and outturns. The results showed that the interacted terms between public health expenditure and governance have a negative and significant relationship with infant mortality while the un-interacted public health expenditure forms were seen to have a positive relationship with infant mortality. In particular, an interaction between allocations and governance reduces infant mortality rate by -22.3% at 1% while an interaction between governance and outturns reduces infant mortality rate by -24.09% at 1%. This clearly indicates that governance has role to play in fostering a negative relationship between public health expenditure and infant mortality rate. Therefore, the government of Uganda should not only increase its funding to the health sector but also improve on the governance quality. Strong and functioning governance structures minimize leakages of financial resources allocated to the health sector and subsequently lead to low infant mortality rates.