Title:
Is Fiscal Policy a Lever for the Household Consumption Expenditure–Health Outcomes Nexus? Evidence From Sub-Saharan African Countries

Authors:
Joseph Abuga Orayo, Simeo Okelo, CPA Dennis Nyamasege, Kenya

Abstract:

Health outcomes reflect households’ capacity to secure health-enhancing goods and services, but the effectiveness of such expenditure may depend on the fiscal environment within which households operate. This study examined whether fiscal policy serves as a lever in the relationship between household consumption expenditure and health outcomes in 27 Sub-Saharan African countries from 2000 to 2024. Life expectancy at birth and under-five mortality were used as indicators of health outcomes, while tax revenue and government expenditure represented fiscal policy. The study employed secondary panel data obtained from the World Bank’s World Development Indicators and Worldwide Governance Indicators databases. Fixed-effects regression models with robust standard errors were estimated, incorporating interaction terms to determine whether fiscal policy conditioned the household consumption expenditure–health outcomes relationship. The results showed that household consumption expenditure had no statistically significant relationship with life expectancy, while its positive relationship with under-five mortality was weakly significant at the 10% level. The interactions of household consumption expenditure with tax revenue and government expenditure were statistically insignificant, indicating that neither fiscal measure significantly moderated the relationship between household consumption expenditure and the two health outcomes. Although the estimated models were jointly significant, fiscal policy did not operate as a statistically significant lever in the household consumption expenditure–health outcomes nexus during the study period. The study concludes that improvements in household consumption capacity and the availability of fiscal resources may be insufficient to enhance population health unless supported by effective revenue utilization, stronger public service delivery, and sustained investment in accessible healthcare systems.

DOI: https://doi.org/10.51505/IJEBMR.2026.10904