World Health in the 21^st Century—Global or Transformed?

Shu-Fen Tseng[1] and Chin-Chang Ho

Graduate School of Social Informatics, Yuan Ze University, Taiwan

Introduction

        Globalization reflects a widespread perception that the world is rapidly being integrated into a shared social space by economic and technological forces.  The development in one region can have profound impacts for the life chances of individuals or communities on the other side of the world.  However, beyond a general recognition of an intensification of global interconnectedness, there is a substantial disagreement on how globalization should be conceived, the explanation of this social phenomenon, and structural consequences of its forces. 

Hyperglobalizers argue that economic globalization is bringing about a denationalization of economies through the establishment of transnational networks of production, trade, and finance.  They celebrate the emergence of a single global market and the principle of global competition as the harbingers of human progress. (Held et al., 1999). From another point of view, Rosenau (1997) and Giddens (1996) represented transformationalist view and argued that contemporary patterns of globalization are inscribed with contradiction and are significantly shaped by conjunctural factors.  That is, some states are becoming increasingly enmeshed in the global order while others are becoming increasingly marginalized (Held et al., 1999).

A variety of literatures explored the impact of globalization on the changes of industry and occupation structures, the consequence of jobless growth and unemployment, and the increasing patterns of polarization and social inequality (Castells, 1996,1997,1998; Esping-Andersen, 1999;Atkinson, 1999; Aghion and Williamson, 1998;Galbraith, 1998;Herzenbery et al., 1998).  However, how does this global trend of information economy affect related health domains is rarely explored.  Therefore, the first objective of this paper is to examine the trend and distribution of health expenditure worldwide.  Is there a consistent pattern among states as what hyperglobalizers hypothesize, or diversities as what transformationalists suggested?  Do the spending patterns differ among states in varied levels of economic development and in different world regions?

        The intertwining of national economies, and the dependency of government finance on global markets and foreign lending created the conditions for an international fiscal crisis of the nation-state.  The nation state is increasingly powerless in controlling monetary policy, deciding its budget, collecting its corporate taxes, and fulfilling its commitments to provide social welfare.  The globalization of production and investment thus threatens the welfare state (Castells, 1997).  Followed the argument, we would expect to see the diminishing in public or governmental intervention on social services, such as health, education and an array of care-giving activity.  Thus, our second objective is to examine the changing role of nation-states by exploring their intervention on health expenditure. 

Esping-Andersen (1999) argued that in facing the unprecedented forces of globalization, three distinct employment trajectories were reflected in different welfare regimes.  Germany (conservative welfare regime) stands as a version of European jobless growth; Sweden (social democratic regime) is the best example of the Nordic welfare state-led model of service expansion; and the United States (liberal regime) is the best case of unregulated, market-driven employment.  The increasing or declining expenditure and jobs in social service (i.e. education and health), thus reflect three welfare regime trajectories.  If the effects of regimes exist, then we should see the decline of health services and government spending in the liberal and conservative welfare states, and the increase of health service in the social democratic regimes.  Accordingly, this study further examines the patterns of public health spending among states in different welfare regimes.  Can we find any distinct pattern in the conservative, social democratic, and liberal regimes respectively? 

        An intensification of global interconnectedness in trades of service and manufacturing goods, foreign direct investments, and international lending and debts is characterized in the process of globalization.  The third objective of this study is to analyze the effects of global links and interconnectedness on the spending of social services among states in different regions and in various stages of development.  Specifically, this objective aims at exploring the extent of global effects on the governmental health expenditure.  Do global links show its significant impact on determining state’s health spending and shaping national health services?  Do the impacts differ among regions and states in varied level of economic developments?

Data and Method

        Data and documents were collected and compared from variety sources of Organization for Economic Cooperation and Development (OECD), United Nations (UN), World Bank, World Trade organization (WTO), and World Health Organization (WHO).  Specifically, data of health expenditure and health services from 1995 to 1998 were collected from the World Health Reports, WHO.  Data on global trades and investments comes from the World Bank.  Basic indicators among states were collected from the UN and World Bank.

        Descriptive analyses were employed to examine the trends of health expenditure and public health expenditure.  Moreover, the trends in three welfare regimes were compared.  Regression model was used to examine the effects of global links on the governmental health expenditure and health services.

Results

The left column of Table 1 shows the trends of health expenditure from 1995 to 1998[2] by different income levels, regions, and the stage of economic development defined by the World Bank.  By income levels, the results suggested a decline of health expenditure among upper middle income states, and an increase among high, lower middle, and low-income states.  By region criteria, we found a consistent increase of health expenditure worldwide.  By developmental stage, the Developed Market-Economy (DME), Other Developing countries (ODC) and the Least Developed countries (LDC) show increasing trends in spending, while the Economies in Transition (EIT) countries show a decline on health expenditure. 

We further divided states by their regions and developmental stages and found substantial differences exist among states (The left column in Table 2).  The North America-developed, Central and East Europe-economic in transition, Central Asia-economic in transition, Asian Pacific-newly industrial economies, North and South Africa-developing countries show a negative growth on health expenditure.  While the Latin America-developing, North Europe-developed, Middle East, Asian pacific-developed and developing, and Central and East Africa-least developed countries show an increase on health expenditure from 1995 to 1998.

The right column of Table 1 shows the changes of public health expenditure rate of GDP from 1995 to 1998.  The results suggested that the public health expenditure decreased among countries in upper middle income level and a high growth among high-income countries.  By regions, Europe region (EUR) and South-Ease Asia region (SEAR) show a decline in governmental spending on health, and Pan-American region (AMR), Eastern Mediterranean region (EMR), Western Pacific region (WPR), and African region (AFR) show a growth trend on public health expenditure.  While DME, LDC and EIT show a negative growth on governmental health expenditure, the ODC countries show an increase on public spending.

By the criteria of region and developmental stage (The right column of Table 2), the results indicated that the North America-Developed, Central and Eastern Europe-economic in transition countries and South Africa had a negative growth on public health expenditure.  The Middle East, Asian Pacific-Newly Industrial Economies, Latin America-Developing, North Africa-Developing, and Asian Pacific-Developing countries show an increase of public spending on health.  Other regions revealed a small change from 1995 to 1998.

        We further examined models of three welfare regimes.  Based on Esping-Andersen argument, we should see an increase of public health expenditure in social democratic regimes (i.e.Sweden and Denmark), a significant decrease in liberal regimes (i.e. United States, Canada and United Kingdom), and a decrease in conservative regime (i.e. Germany).  Table 3 indicates the results.  The social democratic regimes did show a substantial increase of governmental expansion on health expenditure.  The trends in the liberal regime suggested a downward spending on the scale of total health expenditure.  While the United States and Canada show a significant decrease in state’s intervention on health activities, the UK show a small increase in public spending.  In what Esping-Andersen (1999) called the conservative regime, Germany shows a reverse trend of increasing both on the scale of total and public health expenditure.  Japan also shows a growth trend of health expenditure.

Table 4 shows the results of regression model.  The results indicated that the global links of trade did not show significant impact on the changes of health expenditure (beta=-.053).  Yet, we found a strongly negative effect on health expenditure among the EIT countries (beta=-.184, p<.05), and a positive effect on health expenditure among the Middle East countries (beta=.241, p<.001), controlling for other regions, GNP, and Global trades factors.

Discussion

        Our results suggested that the distribution of health expenditure diverse worldwide.  While the America Developed countries, Economic in Transition countries and Africa Developing countries presented a negative growth of health expenditure, the Middle East, Asian Pacific-Developing, Least Develop Africa and Latin America-Developing countries show a significant boost of spending on health.  Obviously, the pattern of global spending on health is far from unified from the results of this study. 

The negative growth of governmental spending on health is found in the America Developed, Economic in Transition, and South Africa Developing countries.  To what extent the negative growth among these countries can be explained by powerless state hypothesis or by generally degenerative economies needs a further examination.  Nevertheless, the countries of liberal welfare regime, namely the US and Canada do demonstrate the decreasing governmental spending as Esping-Andersen (1999) suggested.  And, the policy of state-led service expansion was reflected on a substantial growth of public health expenditure among countries in the social democratic welfare regime.  Although Esping-Andersen (1999) argued that there is a lack of public care services in Germany, our results suggested a reverse trend and an increase in public spending on health.

Global links on trades did not show its effect on the changes of public health expenditure.  Whether this is due to the delaying effect of health on the globalization process, or the patterns of globalization simply differ worldwide needs to be clarified in the further study.  Our study confirms that the US followed the liberal model to curtail public social services, and the North Europe countries did expand state-led social services which is accordance with the suggestion of the social democratic model. 

Interestingly, we found a general increase of public health expenditure among developing regions.  Whether the increase of public health expenditure in these developing regions is due to their generally economic growth or their authoritative orientation of governments deserves further exploration.  Does the “Catalytic” states suggested by Weiss (1998) exist in the globalization process?   A significantly negative effect on the Economic in Transition countries implies the importance of conjunctural factors on shaping the pattern of globalization.  It might be the political structure playing a role in shaping national spending on social services in this finding. 

This study is an exploratory attempt to apply globalization theories in examining changes of health expenditure and services.  Several research issues, such as the explanation of why different patterns exist in some regions, the governmental role in the developing countries, and the future of the NIT countries need to be explored in the future study.

Table 1: The Growth Rate of Total & Public Health Expenditure of GDP, 1995-1998

*Source: World Bank (1998), Income Level is based on GNP per capita in 1996,

Low-income economies: Less than $785;

Lower-middle-income economies: $785~$3,115;

Higher-middle-income economies: $3,115~$9,636;

High-income economies: Higher than $9,636.

**Region code Key:

AFR: African region

AMR: Pan-American region

EMR: Eastern Mediterranean region

EUR: European region

SEAR: South-East Asia region

WPR: Western Pacific region

***UN Development code key:

DME: Developed market-economy

LDC: Least developed countries

ODC: Other developing countries

EIT: Economies in transition

Table 2: The Growth Rate of Total & Public Health Expenditure of GDP by Region/Development, 1995-1998

Table 3: The Growth Rate of Total & Public Health Expenditure of GDP by Different Regimes, 1995-1998

*The three welfare regimes are categorized by Esping-Andersen (1999).

Table 4：Regression on the Changes of Public Health Expenditures by Selected Variables

*P<.05 **P<.01

References

Aghion, P. and J. G. Williamson.  Growth, Inequality and Globalization. UK:Cambridge University Press.

Atkinson, A. B. The Economic Consequences of Rolling Back the Welfare State.  Massachusetts: MIT Press, 1999.

Castells, M. The Information Age: Economy, Society and Culture. Massachusetts: Blackwell Publishers, 1996,1997,1998.

Esping-Andersen, G. Social Foundations of Postindustrial Economies. NY: Oxford University Press, 1999.

Galbraith, J. K. Created Unequal: The Crisis in American Pay. NY: Free Press, 1998.

Giddens, A. “Globalization: A keynote Address,” UNRISD News 15, 1996.

Held, D., A. McGrew, D. Goldblatt, and J. Perraton. Global Transformations. CA: Standford University Press, 1999.

Herzenberg, S.A., J.A. Alic, and H. Wial. New Rules for a New Economy. NY: Cornell University Press, 1998.

Pierson, C. Beyond the Welfare State. Pennsylvania: the Pennsylvania State University Press, 1998.

Rosenau, J. Along the Domestic-Foreign Frontier. Cambridge University Press, 1997.

Sassen, S. Losing Control? Sovereignty in an Age of Globalization. NY: Columbia University Press, 1996.

Strange, S. The Retreat of the State: The Diffusion of Power in the World Economy. Cambridge University Press, 1996.

Weiss, L. The Myth of the Powerless State. NY: Cornell University Press, 1998.

World Development Report 1993, 1988, 2000/2001. World Bank. Press.

World Bank World Development Indicators database available at http://devdata.worldbank.org/data-query/

World Health Report 1995, 1996, 1997, 2000. World Health Organization.

回目錄