Time: 13:00-15:00 (UK Time), Wednesday, 14 December 2022
Presenters: Dr. Elizabeth Nanziri, Stellenbosch University Business School & Dr. Judith Kabajulizi, Coventry University
Co-author: Dr. Albert Muparuri, Stellenbosch University Business School
Chair: Prof. Victor Murinde, SOAS University of London
Abstract
We investigate the hypothesis that the contribution of migrant remittances to beneficiary economies can be compromised by governance. During the past three decade, the volume of migrant remittances has increased in recipient countries. For instance in 2016, official remittance flows to developing countries reached US$ 400 million, representing over 70 per cent of the global remittance flows. For some African countries, remittances represented 20% of GDP. Micro level evidence shows that recipients use remittances mainly for social services (education, healthcare) and food consumption. This is because public provision of social services is inadequate in many recipients African countries. But there is a paucity of evidence of the relationship between remittance flows and government decisions on social services budget allocation.
Using liberal and electoral democracy as governance indicators for 30 African countries, we estimate the interactive effect of remittances flows and these governance indicators on public health expenditure. Given that remittances are endogenous, we employ the two-stage least squares technique. Data for this study comes from World Bank World Development Indicators and VDem for a period of 1998 – 2020.
Preliminary results provide evidence of crowding-out of public health expenditure in the presence of weak democracies, and a subsequent crowding-in of private healthcare. The results suggest that autocratic tendencies deprive legislators of the power to negotiate for appropriate budget allocations for the health sector in these countries. Our results are robust when we use governance indicators (voice, accountability and corruption), and are consistent with the literature. Thus, for countries that receive large volumes of remittances, our results suggest that they have to be strategic about how to use remittances to complement their public health budgets if they are to meet the universal health coverage goals.
Presenters
Dr. Elizabeth Nanziri is the Director of the African Centre for Development Finance, and a Senior Lecturer at the Stellenbosch Business School. She is a British Academy Scholar and a former Newton International Fellow at the University of Oxford’s Centre for the Study of African Economies. She has taught both undergraduate (Economics) and post-graduate (MBA & MPhil) students at renowned, and previously marginalised academic institutions. She has also offered guest lectures on Development Studies at universities in Europe (Vrije University & Vlerick Business School Amsterdam) and in the United Stated of America (Juniata College, Kansas University, University of Massachusetts).
Her research field is development economics focusing on finance; behavioural economics; gender and welfare. She has experience with randomized control trials (RCTs), field experiments, household surveys and micro-data, and general equilibrium models. She is a researcher and trainer with the African Economic Research Consortium, a renown think-tank in Africa.
Elizabeth also has substantial experience with the policy making process in East and Southern Africa. Prior to her academic role, she was the Chief Executive Officer of the South African Savings Institute, under the Ministry of Finance in South Africa and the Industrial Development Corporation. She also spent time at the World Bank Office of the Chief Economist for Africa region in Washington, DC. and has consulted with the African Development Bank and national/government departments. She enjoys the intersectionality of academia and practice, i.e., converting research into policy.
She holds a PhD in Economics from the University of Cape Town, an MA in Economic Policy and Planning and a BA (Hons) in Economics and Political Science from Makerere University in Uganda.
Dr. Judith Kabajulizi is an Assistant Professor in Economics at the School of Economics, Finance and Accounting, Coventry University, UK. She holds a PhD (Health Economics) of the London School of Hygiene and Tropical Medicine, University of London. Her primary research interest is in Development Economics with a niche in the economics of health and health care. Investigating the economic impact of diseases and the efficient allocation of the scarce resources for health care, to inform policy development, is the general goal of her research. She uses applied economics methods to evaluate the problem at hand.
Judith’s current research projects is investigating whether social capital has a mediating role on the public healthcare financing effect on quality health care. In recent research, she assessed the economy-wide effects of infectious diseases, the case of Covid-19 in Uganda (Journal of International Development). Other applied research that Judith conducted include an investigation of the association between non-communicable diseases and sustainable development in Sub-Saharan Africa (Health Policy and Planning journal), the impact of healthcare financing schemes on access and quality of health care in Uganda (Health Economics Review), and the welfare implications of public health care financing in Uganda (Health Policy and Planning journal). She is also collaborating on other macroeconomics projects that include an examination of the institutional effect on fiscal consolidation and productivity, and the impact of the managed exchanged rate regime and foreign exchange risk exposure on firm level productivity.