Remittances, political economy and public health expenditure: evidence from Africa

This article revisits the argument that in the absence of good governance, remittance inflows cause the government to renege on the provision of social services and crowd out public finance where private substitutes exist. Using a quantile approach on a sample of African countries for the period 1990-2022, and after controlling for the endogeneity of remittances, the results show a positive contribution of remittances to public health expenditure, which tis annihilated into a non-linear crowd-out of public health expenditure across quantiles in the presence of varied political regimes. This relationship does not change even in the presence of a health shock. The crowd-out of public health expenditure points to an indirect effect of remittances through household consumption, private investment and tax revenue.