Health investment efficiency and institutional quality in Sub-Saharan Africa

Abstract

Sub-Saharan Africa (SSA) faces a paradox of rising health spending alongside persistently low life expectancy, raising fundamental questions about health investment efficiency. Understanding how institutional quality and environmental degradation shape that efficiency is essential for accelerating progress toward SDG 3. The Simar and Wilson (2007) Algorithm 2 two-stage bootstrap Data Envelopment Analysis procedure is applied to 45 SSA countries over 2000–2023. Life expectancy is the output; government health expenditure per capita and mean years of schooling are inputs. A bootstrap truncated regression examines institutional quality, carbon (CO2) emissions, electricity access, population ageing, and out-of-pocket expenditure as efficiency determinants. An income-group interaction framework tests whether institutional quality effects vary across income levels. The mean bias-corrected efficiency score is 0.866, implying a 13.4% average efficiency shortfall. Institutional quality significantly reduces efficiency among low-income countries (β = - 0.105, p < 0.01) but has no significant effect at higher income levels. CO2 emissions reduce efficiency (β= - 0.047, p < 0.01), electricity access improves it ( β = 0.005, p < 0.01), and out-of-pocket expenditure reduces it consistently across all specifications. Substantial life expectancy gains are achievable through more efficient use of existing health resources, directly supporting SDG 3.8. Within a three-to-five-year policy horizon, national health ministries and finance authorities should prioritize strengthening public financial management and procurement systems, expanding financial risk protection to reduce out-of-pocket spending, improving electricity access for health facilities, and implementing pollution-control and clean-energy initiatives. These measures can enhance health system efficiency while advancing SDGs 3.9 and 13.