Granger causality between Health and Economic Growth in oil exporting countries

This paper examine the causal relationship between the health expenditure and the GDP in a panel of 11 selected oil exporting countries by using panel unit root tests and panel cointegration analysis. A three variable model is formulated with oil revenues as the third variable. The results show a strong causality from oil revenues and economic growth to health expenditure in the oil exporting countries. Yet, health spending doesnot have any significant effects on GDP in short- and long-run. The findings imply high vulnerability of oildependent countries to oil revenues volatility. To insulate the economy from oil revenue volatility requires institutional mechanisms de-linking health expenditures decisions from current revenue.