Illicit financial flows and the provision of child and maternal health services in low- and middle-income countries.

BACKGROUND: Illicit financial flows (IFFs) drain domestic resources with harmful social effects, especially in countries which are too poor to mobilise the revenues required to finance the provision of essential public goods and services. In this context, this article empirically examined the association between IFFs and the provision of essential health services in low- and middle-income countries. METHODS: Firstly, a set of indicators was selected to represent the overall coverage of essential health services at the country level. Next, a linear multivariate regression model was specified and estimated for each indicator using cross-sectional data for 72 countries for the period 2008-2013. RESULTS: After controlling for other relevant factors, the main result of the regression analysis was that an annual 1 percentage point (p.p.) increase in the ratio of IFFs to total trade was associated with a 0.46 p.p. decrease in the level of family planning coverage, a 0.31 p.p. decrease in the percentage of women receiving antenatal care, and a 0.32 p.p. decrease in the level of child vaccination coverage rates. CONCLUSIONS: These findings suggest that, for the whole sample of countries considered, at least 3.9 million women and 190,000 children may not receive these basic health care interventions in the future as a consequence of a 1 p.p. increase in the ratio of IFFs to total trade. Moreover, given that family planning, reproductive health, and child immunisation are foundational components of health and long-term development in poor countries, the findings show that IFFs could be undermining the achievement of the 2030 Agenda for Sustainable Development.

Social costs of illicit financial flows in low- and middle-income countries: the case of infant vaccination coverage.

The liberalization of capital flows is generally associated with prospects of higher growth. However, in developing countries, opening the capital account may also facilitate the flow of capital out of the country through illicit financial flows (IFFs). Given that IFFs drain the scarce public resources available to finance the provision of public goods and services, the extent of illicit capital flows from developing countries is serious cause for concern. In this context, as a first step in analysing the social costs of IFFs in developing countries, this article studied the relationship between IFFs and infant immunization coverage rates. Data for 56 low- and middle-income countries for the period 2002-13 were used in the empirical analysis. The main result was that the relative level of IFFs to total trade negatively impacted vaccination coverage but only in the case of countries with very high levels of perceived corruption. In this case, the total effect of an annual 1 p.p. increase in the ratio of IFFs to total trade was to reduce the level of vaccination coverage rates over the coming years by 0.19 p.p. Given that there was an annual average of 18 million infants in this cluster of 25 countries, this result suggests that at least 34 000 children may not receive this basic health care intervention in the future as a consequence of this increase in IFFs in any particular year.

Determinants of efficiency in reducing child mortality in developing countries. The role of inequality and government effectiveness.

The main aim of this article was to analyze the relationship of income inequality and government effectiveness with differences in efficiency in the use of health inputs to improve the under-five survival rate (U5SR) in developing countries. Robust Data Envelopment Analysis (DEA) and regression analysis were conducted using data for 47 developing countries for the periods 2000-2004, 2005-2009, and 2010-2012. The estimations show that countries with a more equal income distribution and better government effectiveness (i.e. a more competent bureaucracy and good quality public service delivery) may need fewer health inputs to achieve a specific level of the U5SR than other countries with higher inequality and worse government effectiveness.