Public Spending, Governance and Child Health Outcomes: Revisitiing the Links

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This paper examines the empirical determinants of child health in developing countries and how public policy may interact with these. It provides a critical review of previous studies on determinants of child health, as measured by infant and child mortality in developing countries. Then it seeks to improve on previous empirical approaches by using a more comprehensive and richer panel dataset compared to earlier studies, drawing on a health database covering 136 countries over 1960-2005, as well as a broad variety of alternative indicators of governance, including data from the International Country Risk Guide (ICRG) and the Open Budget Index (OBI). The empirical results on the role of governance (and the interaction of governance with public spending) appear mixed, throwing some doubt on the conclusiveness of earlier empirical studies. The cross-section analyses cohere with earlier findings that governance does play a role in enhancing the link between public spending and child health; however, a battery of regressions covering as much variation across time as possible, and the introduction of other possible governance indicators and instruments generate mixed results. It is possible that both the public spending and the governance indicator may only imperfectly and partially capture the true amount of resources and quality of institutions, respectively, that these two variables are supposed to reflect.