The role of inflation and institutional quality in shaping healthcare expenditure: Insights from Asia–Pacific countries
Muhammad Azam Khan (),
Salma Zahir () and
Sardar Fawad Saleem ()
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Muhammad Azam Khan: Abdul Wali Khan University Mardan
Salma Zahir: Higher Education Department
Sardar Fawad Saleem: Abbottabad University of Science & Technology
International Economics and Economic Policy, 2026, vol. 23, issue 1, No 1, 39 pages
Abstract:
Abstract Healthy workers are essential for achieving higher productivity. It is generally believed that people living in developing countries tend to have poorer health, and countries with poor health outcomes are often economically disadvantaged. This study investigates the impact of inflation rate (INF) and institutional quality (IQ) on healthcare expenditure (HCE) in 20 Asia–Pacific countries (9 developed and 11 developing countries) from 1996 to 2022. Current study employed panel autoregressive distributed lag (PARDL)/pooled mean group (PMG), fully modified ordinary least squares (FMOLS), and dynamic ordinary least squares (DOLS) methods for empirical analysis. The findings show that the inflation rate has a positive effect on HCE, indicating that an increase in the general price level significantly raises health costs. Additionally, IQ has a positive impact, emphasizing the importance of good governance for public health. The current study outcomes suggest that the management authorities of these Asia–Pacific countries should focus on implementing effective monetary and fiscal policies to mitigate inflationary pressures and cultivate conducive governance frameworks to improve public health. Moreover, as per the results of the study, the developing countries have to focus more on controlling inflation and improving governance for better health outcomes.
Keywords: Healthcare expenditure; Inflation rate; Institutional quality; Panel data analysis; Asia–Pacific countries (search for similar items in EconPapers)
JEL-codes: I15 I18 O11 O53 (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1007/s10368-025-00698-0
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