Various international organizations have documented the existence of corruption and similar practices in many different areas of the health care sector. Empirical studies show that in many poor countries over 80 percent of the population has experienced corrupt practices in the health sector. In rich countries corruption takes other forms such as overbilling and bribes when contracts to build hospitals are signed. The question addressed in this paper is if corruption also has a negative impact on population health. In the theoretical section we argue that the causal link between low levels of Quality of Government (QoG) and population health can be either direct or indirect. The former takes place when, for example, low QoG causes high levels of illegitimate absenteeism among health workers or demands for direct payment of bribes for adequate treatment. The latter (indirect) causal link is when low QoG leads to poverty, low social capital, and low levels of life satisfaction - all leading to difficulties in handling various life challenges which in turn causes health problems. Our central question is policy related. If you want to improve population health, is it better to simply increase spending on health care (and if so, should this be public or private money), or is it better to improve the overall quality of the countries’ government institutions? Using cross section data from more than 120 countries, our findings in the bivariate analyses are that more of a QoG variable is positively associated with higher levels of Life Expectancy, lower levels of Mortality Rates for Children and Mothers, higher levels of Healthy Life Expectancies and higher levels of Subjective Health feelings. In contrast to the strong relationships between the QoG variables and the Health indicators, the relationships between the health spending measures and population Health are rather weak most of the time and occasionally non-existent. Moreover, for Private Health Spending as well as for Private Share of Total Health Spending, the relation to good Health is close to zero or slightly negative. The policy recommendation coming out of our study to improve Health levels around the world, in rich countries as well as in poor countries, is to improve the Quality of Government and to finance health care with public, not private, money.
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