Health Expenditure, Climate Changes and Corruption in the MENA Region: A Granger Causality Approach

Abstract

The growing literature on studying climate change has increased awareness about health problems, yet the job is far from done. This study contributes to understanding the granger causal links between environmental degradation and public health costs by analyzing the relationship between health costs and environmental degradation for a panel of 19 MENA economies over the period 1996 through 2013. Using panel data specifications, the paper identified a two-way relationship between public health expenditure and CO2 emissions. These empirical results link the contribution of CO2 emissions accumulation to the increase in public health expenditure. Furthermore, using Granger causality test, the empirical results highlight the presence of a two-way relationship between public health expenditure and corruption. Thus, corruption could be considered as a constraint to environmental quality and a channel through which environmental degradation triggers more health costs. Evidence of adverse health effects will strengthen the case for preventative policies and can also guide priorities for planned adaptive strategies.