Fiscal capacity and public health expenditure in the west African Economic and Monetary Union: the moderating effect of political instability

The aim of this paper is to examine the moderating effect of political instability on the relationship between fiscal capacity and public health expenditure. On the basis of panel data from six (06) countries of the West African Economic and Monetary Union, over the period 2000-2020, the method of double least squares with time and individual fixed effects was applied. It was established that fiscal capacity positively influenced public health expenditure. The coefficient for the interaction term was negative and significant, affirming the hypothesis that political instability distorts the positive impact of public health expenditure. It is necessary for various governments to further improve their mobilization of fiscal resources to move towards universal health coverage. To mitigate the adverse effects of political instability on public healthcare financing, there is a need for West African Economic and Monetary countries to improving the quality of governance. The implementation of economic policies aimed at reducing inequalities, creating jobs and providing equitable opportunities for all citizens helps to improve people's conditions, fighting corruption and promoting transparency and accountability. These economic policies are necessary for political stability, which facilitates the mobilisation of fiscal resources and consequently improves public health expenditure. Our study examines the moderating effect of political instability on the relationship between fiscal capacity and public health expenditure. The study reveals that political instability distorts the positive influence of fiscal capacity on public health expenditure in the WAEMU countries. It is necessary to promote political stability, which is the guarantor of fiscal capacity and, thus increase public health expenditure.