Synergy of public spending on health and education and human development in the WAEMU countries

Abstract

In the context of a major societal preoccupation with improving economic and human development, governments are likely to rely heavily on public spending on health and education as key instruments and fundamental support for improving the quality of life of their citizens. This study examines the synergistic effects of public expenditures on health and education on human development in seven (7) countries of the West African Economic and Monetary Union (WAEMU) between 1999 and 2022. Information on the variables is drawn from three major institutional sources (UNDP, WDI and WGI), ensuring their reliability and international comparability. This study is limited by the quality and irregularity of the panel data in the WAEMU. A risk of residual endogeneity (omitted variable bias) remains, despite modeling efforts. The results of the panel-corrected standard error (PCSE) and Driscoll-Kraay methods indicate that spending in these two sectors significantly improves the human development index, life expectancy and primary school enrollment rates while reducing infant mortality. The analysis reveals that complementary investments in health and education generate greater effects on human development than isolated investments do. This finding underlines the importance of a balanced policy approach that simultaneously promotes both sectors, a result confirmed by the IV-2SLS method, which corrects for potential endogeneity. These findings call on WAEMU governments to adopt coordinated budgetary policies to harness the health-Education synergy. The implication is to move away from silo management towards joint budgeting. It is crucial to increase expenditure efficiency by focusing on primary healthcare and the quality of education.