Changes in catastrophic health expenditure in post-conflict Sierra Leone: an Oaxaca-blinder decomposition analysis.

BACKGROUND: At the end of the eleven-year conflict in Sierra Leone, a wide range of policies were implemented to address both demand- and supply-side constraints within the healthcare system, which had collapsed during the conflict. This study examines the extent to which households' exposure to financial risks associated with seeking healthcare evolved in post-conflict Sierra Leone. METHOD: This study uses the 2003 and 2011 cross-sections of the Sierra Leone Integrated Household Survey to examine changes in catastrophic health expenditure between 2003 and 2011. An Oaxaca-Blinder decomposition approach is used to quantify the extent to which changes in catastrophic health expenditure are attributable to changes in the distribution of determinants (distributional effect) and to changes in the impact of these determinants on the probability of incurring catastrophic health expenditure (coefficient effect). RESULTS: The incidence of catastrophic health expenditure decreased significantly by 18% from approximately 50% in 2003 t0 32% in 2011. The decomposition analysis shows that this decrease represents net effects attributable to the distributional and coefficient effects of three determinants of catastrophic health expenditure - ill-health, the region in which households reside and the type of health facility used. A decrease in the incidence of ill-health and changes in the regional location of households contributed to a decrease in catastrophic health expenditure. The distributional effect of health facility types observed as an increase in the use of public health facilities, and a decrease in the use of services in facilities owned by non-governmental organizations (NGOs) also contributed to a decrease in the incidence of catastrophic health expenditure. However, the coefficient effect of public health facilities and NGO-owned facilities suggests that substantial exposure to financial risk remained for households utilizing both types of health facilities in 2011. CONCLUSION: The findings support the need to continue expanding current demand-side policies in Sierra Leone to reduce the financial risk of exposure to ill health

Are Proposed African Monetary Unions Optimal Currency Areas? Real and Monetary Policy Convergence Analysis

A spectre is hunting embryonic African monetary zones: the EMU crisis. The introduction of common currencies in West and East Africa is facing stiff challenges in the timing of monetary convergence, the imperative of bankers to apply common modeling and forecasting methods of monetary policy transmission, as well as the requirements of common structural and institutional characteristics among candidate states. Inspired by the premise of the EMU crisis, this paper assesses real and monetary policy convergence within the proposed WAM and EAM zones. In the analysis, monetary policy targets inflation and financial dynamics of depth, efficiency, activity and size while real sector policy targets economic performance in terms of GDP growth at macro and micro levels. Findings suggest overwhelming lack of convergence; an indication that candidate countries still have to work towards harmonizing cross-country differences in fundamental, structural and institutional characteristics that hamper the convergence process

Are Proposed African Monetary Unions Optimal Currency Areas? Real, Monetary and Fiscal Policy Convergence Analysis

Purpose – A spectre is hunting embryonic African monetary zones: the EMU crisis. This paper assesses real, monetary and fiscal policy convergence within the proposed WAM and EAM zones. The introduction of common currencies in West and East Africa is facing stiff challenges in the timing of monetary convergence, the imperative of central bankers to apply common modeling and forecasting methods of monetary policy transmission, as well as the requirements of common structural and institutional characteristics among candidate states. Design/methodology/approach – In the analysis: monetary policy targets inflation and financial dynamics of depth, efficiency, activity and size; real sector policy targets economic performance in terms of GDP growth at macro and micro levels; while, fiscal policy targets debt-to-GDP and deficit-to-GDP ratios. A dynamic panel GMM estimation with data from different non-overlapping intervals is employed. The implied rate of convergence and the time required to achieve full (100%) convergence are then computed from the estimations. Findings – Findings suggest overwhelming lack of convergence: (1) initial conditions for financial development are different across countries; (2) fundamental characteristics as common monetary policy initiatives and IMF backed financial reform programs are implemented differently across countries; (3) there is remarkable evidence of cross-country variations in structural characteristics of macroeconomic performance; (4) institutional cross-country differences could also be responsible for the deficiency in convergence within the potential monetary zones; (5) absence of fiscal policy convergence and no potential for eliminating idiosyncratic fiscal shocks due to business cycle incoherence. Practical implications – As a policy implication, heterogeneous structural and institutional characteristics across countries are giving rise to different levels and patterns of financial intermediary development. Thus, member states should work towards harmonizing cross-country differences in structural and institutional characteristics that hamper the effectiveness of convergence in monetary, real and fiscal policies. This could be done by stringently monitoring the implementation of existing common initiatives and/or the adoption of new reforms programs. Originality/value – It is one of the few attempts to investigate the issue of convergence within the proposed WAM and EAM unions