Abstract
The aim of this study is to examine the relationship between health expenditure, institutional quality, and under-five mortality rates in sub-Saharan African countries. Specifically, the study seeks to explore the mediating role of institutional quality in this relationship, focusing on understanding how variations in healthcare spending and institutional frameworks impact child health outcomes. By examining these dynamics, the study aims to provide valuable insights that can inform evidence-based policy interventions to reduce under-five mortality and improve child health outcomes in the region. Utilizing data spanning the years 2000 to 2021 from 46 sub-Saharan African countries, this study employs a systems GMM model to explore the intricate relationship between health expenditure and under-five mortality rates (U5MRs), with a particular focus on the mediating role of institutional quality. The findings reveal that the quality of institutions significantly influences the impact of health expenditures on the U5MR. Strong institutional quality enhances the effectiveness of health expenditure in improving child health outcomes, particularly concerning the allocation of external health funds. Conversely, poor institutional quality amplifies the positive impact of domestic private and out-of-pocket health expenditures on the U5MR, as these serve as coping mechanisms in the absence of robust public healthcare systems. This research emphasizes the need for strategies that increase health expenditure and prioritize institutional strengthening to ensure efficient resource allocation and healthcare system management, thereby reducing under-five mortality rates. Furthermore, it underscores the importance of policies that minimize reliance on private and out-of-pocket health expenditures, which can lead to financial burdens and worsened health outcomes. Sub-Saharan African countries can make significant strides toward improving child survival and overall public health by addressing these issues.