Governance and Health Systems in the MENA Countries: A Panel Causality Framework
Keywords:Governance, health system, composite index, causality
A substantial body of research has been carried out to analyze the health system’s determinants, considering a wide range of variables related to economic performance, monetary policy, telecommunication, and demographic statistics. Nevertheless, little is known about the impact of governance on the health system. This paper aims to overcome this shortcoming and to investigate the causality nexus of the health system and governance in short and the long run, using a panel data set for 14 MENA countries over the period 1996-2019. The proposed methodology is based on calculating a Governance Composite Index (GCI) by aggregating several indicators related to good governance. Next, we will try to measure the effects on the health system of selected factors. Finally, a causality analysis is made based on the Engle-Granger two-step approach. Empirical analysis shows that good governance contributes significantly to the health system in the long run but not in the short run. Based on a simulation analysis, we measure the additional rate in the annual growth in good governance that is sufficient to make its short-run effect significant.
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