Estimating the Crowding-Out Effect of Public Health Spending on Out-of-Pocket Expenditures: A Comparative Econometric Analysis between Morocco and South Korea

DOI

10.2991/978-94-6239-680-7_7How to use a DOI?

Keywords

Health financing; Crowding-out effect; Out-of-pocket expenditures (OOP); Universal Health Coverage (UHC); Morocco; South Korea

Abstract

Background: The achievement of Universal Health Coverage (UHC) often confronts the paradox of persistently high out-of-pocket (OOP) expenditures despite increased public investment. This study compares this phenomenon between Morocco, whose system is undergoing major reform, and South Korea, which has a mature system.

Objective: This article aims to quantify and compare the crowding-out effect of public spending on OOP in these two countries to measure the effectiveness of public financial transfers.

Method: An econometric analysis was conducted on panel data (2000-2022) from the World Bank/WHO. A “Pooled OLS” regression model with an interaction term was estimated, using robust and clustered standard errors to ensure the validity of the inferences.

Results: The marginal effect of public spending on OOP is -0.71 in Morocco (95% CI [-0.84, -0.57]) and -1.40 in South Korea. This difference, which is highly statistically significant (p < 0.001), indicates that the effectiveness of public financing is twice as high in South Korea. Hypothesis tests confirm that the transfer is imperfect in Morocco, whereas it exceeds a perfect transfer in South Korea.

Conclusion: The effectiveness of public investment in health is strongly conditioned by the system’s maturity and regulation. For Morocco, budget increases are insufficient without deep structural reforms aimed at improving spending efficiency.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Aazelarab Boughaleb
AU  - Mounir Jerry
PY  - 2026
DA  - 2026/06/20
TI  - Estimating the Crowding-Out Effect of Public Health Spending on Out-of-Pocket Expenditures: A Comparative Econometric Analysis between Morocco and South Korea
BT  - Proceedings of the Conference Morocco-Korea Cooperation: A Lever for Afro-Asian Development (MKC 2025)
PB  - Atlantis Press
SP  - 81
EP  - 93
SN  - 2667-128X
UR  - https://doi.org/10.2991/978-94-6239-680-7_7
DO  - 10.2991/978-94-6239-680-7_7
ID  - Boughaleb2026
ER  -