Causality between health care spending and economic growth in Southern African countries: an applied study using a causality analysis, co-integration test

This study aims to examine the causal relationship between health spending and economic growth in Southern African countries over the period 2000 to 2023, addressing the relative scarcity of regional empirical evidence. The research employs panel cointegration, Granger causality tests, and FMOLS estimations to analyze the short- and long-run dynamics between these variables. The results indicate that the short-term impact of health spending on growth remains limited, except for specific interventions such as the expansion of clean fuel usage. In the long run, a bidirectional relationship was identified, consistent with the theoretical foundations of Human Capital Theory and Wagner’s Law, with varying significance and effect strength across the sampled countries. These findings confirm that health investment reinforces sustainable growth through the human capital channel, provided it is directed efficiently. The study fills a critical knowledge gap by providing a regional perspective on health as a development tool, supporting policymakers in designing effective resource allocation strategies. Finally, the study acknowledges limitations regarding data availability and institutional factors, pointing to future research opportunities focused on linking sustainable health investment to governance and human development indicators across the African continent.