Is the health-led growth hypothesis valid in the Sub-saharan African countries? Fresh evidence from newly developed panel causality tests

Having insights into the validity of the health-led growth hypothesis in the Sub-Saharan African Countries is crucial for forming sustainable, inclusive health and economic growth policies and achieving Sustainable Development Goals in the region. However, less attention has been paid to this research topic. Therefore, this paper uses various health expenditure indicators and recently proposed panel causality methods to provide new insights into whether the health-led growth hypothesis can be valid in 43 Sub-Saharan African countries from 2000 to 2019. Empirical findings unveil that (i) there is a bidirectional causality nexus between the current health expenditures-economic growth and governmental health expenditures-economic growth, (ii) there is a unidirectional causal effect running from economic growth to non-governmental health expenditures, (iii) there is a bidirectional causality nexus between the democracy-economic growth and control of corruption economic growth, (iv) there is a unidirectional causal impact running from political stability to economic growth. Moreover, robustness checks have confirmed that the empirical results are robust. A significant part of the empirical findings reveals that the health-led growth hypothesis could be valid in 43 SSA countries, and institutional factors, which determine cultural/political framework and inequalities in accessing health services, have causal impacts on economic growth.