In the section Articles
Title of the article Government Spending on Healthcare and Economic Growth in Russia: A Regional Aspect
Pages 97-122
Author 1 Olga Anatolyevna Demidova
Candidate of Sciences (Mathematics), Associate Professor, Associate Professor of the Department of Applied Economics
National Research University Higher School of Economics
11 Pokrovsky Bl., Moscow, 109028, Russian Federation
This email address is being protected from spambots. You need JavaScript enabled to view it.
ORCID: 0000-0001-5201-3207
Author 2 Elena Vladimirovna Kayasheva
Lecturer of the Department of Theoretical Economics
National Research University Higher School of Economics
11 Pokrovsky Bl., Moscow, 109028, Russian Federation
This email address is being protected from spambots. You need JavaScript enabled to view it.
ORCID: 0000-0001-8281-0012
Author 3 Artem Vladimirovich Demyanenko
Master’s Student at Faculty of Economic Sciences
National Research University Higher School of Economics
11 Pokrovsky Bl., Moscow, 109028, Russian Federation
This email address is being protected from spambots. You need JavaScript enabled to view it.
Abstract The aim of this paper was to investigate the influence of an increase in government healthcare expenditures on regional economic growth in Russia. Studies have shown that an increase in healthcare expenditures stimulate an increase in GDP through several channels. Firstly, it improves the quality of labor force, which can lead to an increase in labor productivity. Secondly, an increase in productivity and size of labor force lead to consumption expansion and then to firms’ income growth, so there is a multiplication effect. Including the assumption that the relationship between healthcare expenditure and economic growth may be non-linear we formed the hypothesis of the existence of the average optimal share of healthcare expenditure in GRP that maximizes average regional economic growth rate. In this research it was suggested that an increase in healthcare expenditures besides the direct effect on economic growth of a particular region also affects economic growth of neighboring regions. The possible explanation of this is the positive impact of healthcare services received in the neighboring regions on nearby territories, joint national healthcare projects, and distribution of scientific knowledge. Using the spatial Durbin model focusing on regional data of 2005–2017, it was shown that the average optimal share of healthcare expenditures equals to 5,9% of GRP with an inclusion of spatial effects and 7,6% without them, outlining the importance of including interconnection variables between Russian regions into the model. The regional statistics analysis showed the failure to reach the recommended share by most Russian regions, which can be viewed as a possibility for economic growth stimulation in case of the increase in governmental spending on healthcare in the future
Code 332+338
JEL R11, H51, I15, C31, C33
Keywords healthcare ♦ government expenditures ♦ government spending ♦ economic growth ♦ spatial effects ♦ Russian regions
Download SE.2021.1.097-122.Demidova.pdf
For citation Demidova O.A., Kayasheva E.V., Demyanenko A.V. Government Spending on Healthcare and Economic Growth in Russia: A Regional Aspect. Prostranstvennaya Ekonomika = Spatial Economics, 2021, vol. 17, no. 1, pp. 97–122. (In Russian)
References 1. Arbia G. A Primer for Spatial Econometrics. Palgrave Macmillan, 2014, 230 р.
2. Ashraf Q.H., Lester A., Weil D.N. When Does Improving Health Raise GDP? NBER Macroeconomics Annual, 2008, vol. 23, pp. 157–204.
3. Barro R.J. Economic Growth in a Cross Section of Countries. The Quarterly Journal of Economics, 1991, vol. 106, issue 2, pp. 407–443.
4. Barro R.J., Sala-i-Martin X. Convergence. Journal of Political Economy, 1992, vol. 100, no. 2, pp. 223–251.
5. Bloom D.E., Canning D., Sevilla J. The Effect of Health on Economic Growth: Theory and Evidence. NBER. Working Paper Series No. 8587, 2001, 26 p. Available at: (accessed December 2020).
6. Boussalem F., Boussalem Z., Taiba A. The Relationship between Public Spending on Health and Economic Growth in Algeria: Testing for Co-Integration and Causality. International Journal of Business and Management, 2014, vol. II (3), pp. 25–39.
7. Chang K., Ying Y.H. Economic Growth, Human Capital Investment, and Health Expendi-ture: A Study of OECD Countries. Hitotsubashi Journal of Economics, 2006, vol. 47, issue 1, pp. 1–16.
8. Dixon S., McDonald S., Roberts J. The Impact of HIV and AIDS on Africa’s Economic Development. BMJ, 2002, vol. 324, pp. 232–234.
9. Elhorst J.P. Spatial Econometrics: From Cross-Sectional Data to Spatial Panels. Heidel-berg: Springer, 2014, 120 p.
10. Elmi Z.M., Sadeghi S. Health Care Expenditures and Economic Growth in Developing Countries: Panel Co-Integration and Causality. Middle-East Journal of Scientific Research, 2012, vol. 12, no. 1, pp. 88–91.
11. Essletzbichler J. Diversity, Stability and Regional Growth in the United States, 1975–2002. Applied Evolutionary Economics and Economic Geography. Cheltenham, Northampton: Edward Elgar Publishing, 2007, pp. 203–229.
12. Friedmann J. Four Theses in the Study of China’s Urbanization. International Journal of Urban and Regional Research, 2006, vol. 30, issue 2, pp. 440–451.
13. Gallup J.L., Sachs J.D. The Economic Burden of Malaria. The American Journal of Tropical Medicine and Hygiene, 2001, vol. 64, issue 1_suppl, pp. 85–96.
14. Henderson V. The Urbanization Process and Economic Growth: The So-What Question. Journal of Economic Growth, 2003, vol. 8, pp. 47–71.
15. Ivanova N., Kamenskikh M. Efficiency of Government Expenditure in Russia. Ekonomicheskaya Politika = Economic Policy, 2011, no. 1, pp. 176–192. (In Russian).
16. Kurt S. Government Health Expenditures and Economic Growth: A Feder-Ram Approach for the Case of Turkey. International Journal of Economics and Financial Issues, 2015, vol. 5, no. 2, pp. 441–447.
17. LeSag J.P., Pace R.K. Introduction to Spatial Econometrics. New York: Taylor & Francis Group, 2009, 340 p.
18. Lorentzen P., McMillan J., Wacziarg R. Death and Development. Journal of Economic Growth, 2008, vol. 13, pp. 81–124.
19. Lutz W., Samir K.C. Global Human Capital: Integrating Education and Population. Science, 2011, vol. 333, issue 6042, pp. 587–592.
20. Maddison A. Dynamic Forces in Capitalist Development: A Long-Run Comparative View. New York: Oxford University Press, 1991, 352 p.
21. Mayer D., Mora H., Cermeno R., Barona A.B., Duryeau S. Health, Growth, and Income Distribution in Latin America and the Caribbean: A Study of Determinants and Regional and Local Behavior. Investment in Health. Social and Economic Returns. Pan-American Health Organization, 2001, pp. 3–32.
22. Mielck A., Reitmeir P., Vogelmann M., Leidl R. Impact of Educational Level on Health-Related Quality of Life (HRQL): Results from Germany Based on the EuroQol 5D (EQ-5D). European Journal of Public Health, 2013, vol. 23, issue 1, pp. 45–49.
23. Nakamura E., Steinsson J. Fiscal Stimulus in a Monetary Union: Evidence from US Regions. American Economic Review, 2014, vol. 104, no. 3, pp. 753–92.
24. On the Strategy for the Development of Healthcare in the Russian Federation for the Period up to 2025: Decree of the President of the Russian Federation No. 254 of June 6, 2019. Available at: (accessed January 2021). (In Russian).
25. Presidential Address to the Federal Assembly, March 01, 2018. Available at: (accessed January 2021). (In Russian).
26. Rebelo S. Long-Run Policy Analysis and Long-Run Growth. Journal of Political Economy, 1991, vol. 99, no. 3, pp. 500–521.
27. Sala-i-Martin X.X. Regional Cohesion: Evidence and Theories of Regional Growth and Convergence. European Economic Review, 1996, vol. 40, no. 6, pp. 1325–1352.
28. Shediac R., Abouchakra R., Moujaes C.N., Najjar M.R. Economic Diversification. The Road to Sustainable Development. Booz & Company, 2008, 14 p. Available at: (accessed January 2021).
29. Solow R.M. A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 1956, vol. 70, issue 1, pp. 65–94.
30. Strauss J., Thomas D. Health, Nutrition, and Economic Development. Journal of Economic Literature, 1998, vol. 36, no. 2, pp. 766–817.
31. Tscherbanin Yu.A. Transport and Economic Growth: Relationship and Impact. Evraziyskaya Ekonomicheskaya Integratsiya [Eurasian Economic Integration], 2011, no. 3 (12), pp. 65–78. (In Russian).
32. Ulumbekova G.E., Ginoyan A.B., Kalashnikova A.V., Alvianskaya N.V. Healthcare Financing in Russia (2021–2024). Facts and Suggestions. ORGZDRAV: Novosti, Mneniya, Obuchenie. Vestnik VSHOUZ = Healthcare Management: News. Views. Education. Bulletin of VSHOUZ, 2019, vol. 5, no. 4, pp. 4–19. (In Russian).
33. Untura G.A., Kaneva M.A. The Economic Effect of the Expenditure on Science and Healthcare: Econometric Estimates for 2005–2013. Economy of Siberia under Global Challenges of the XXI Century. Volume 2: How to Turn Space from a Curse into a Resource for Development? Novosibirsk: Institute of Economics and Industrial Engineering SB RAS, 2018, pp. 343–354. (In Russian).
34. Wang F. More Health Expenditure, Better Economic Performance? Empirical Evidence from OECD Countries. INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 2015, vol. 52, pp. 1–5.
35. Wang K.-M. Health Care Expenditure and Economic Growth: Quantile Panel-Type Analysis. Economic Modelling, 2011, vol. 28, no. 4, pp. 1536–1549.
36. Zasimova L.S., Kolosnitzyna M.G. Creation of the Healthy Lifestyle for Russian Young People: Possibilities and Limits of the State Policy(From the Materials of the Optional Analysis). Voprosy Gosudarstvennogo i Munitsipalnogo Upravleniya = Public Administration Issues, 2011, no. 4, pp. 116–129. (In Russian).
Submitted 15.01.2021
Revised 25.02.2021
Published online 30.03.2021

ISSN (Print) 1815-9834
ISSN (Online) 2587-5957

Minakir Pavel Aleksandrovich,
Tel.: +7 (4212) 725-225,
Fax: +7 (4212) 225-916,
Samokhina Lyudmila, Executive Editor
Tel.: +7 (4212) 226-053
Fax: +7 (4212) 225-916,
Tel.: +7 (4212) 226-053,
Fax: +7 (4212) 225-916,
To Editorial Staff of “Spatial Economics”
Economic Research Institute FEB RAS
153 Tikhookeanskaya St., Khabarovsk, RUSSIA, 680042



Creative Commons License
Unless otherwise noted, content on this site is licensed under a Creative Commons Attribution 4.0 International License