Paper short abstract:

This paper empirically examines the determinants of social protection and public health expenditure in a cross-section of heterogeneous developing countries from 1990 to 2010.

Paper long abstract:

This paper empirically examines the determinants of social protection and public health expenditure in a cross-section of heterogeneous developing countries from 1990 to 2010. Our hypothesis is that these types of spending are a function of fiscal capacity, the degree of democracy, institutional quality, inequality, internal conflict, trade openness, the presence of financial crises, food insecurity, as well as macroeconomic variables such as inflation and debt servicing that inhibit government expenditure. Our findings suggest that debt servicing robustly reduces social protection spending, whereas higher per-capita income and fiscal capacity encourage it. Greater openness does not necessarily encourage more spending, nor does increased inflation always inhibit it. Rising democratisation promotes social sector spending, and the presence of greater democracy and fiscal capacity reinforces this effect. More equal societies spend more in this direction. Internal conflict and crises variables have ambiguous effects that depend on the type of democratic competition.