Efficiency issues in health investments have received increasing attention, mainly as a
result of the growing amount of resources invested in developing countries and their
mixed impacts on outcomes. The empirical literature has suggested that, although
government spending on health care improves the health status of the population, society
can potentially gain more through the more efficient assignment of health resources. In this context, this paper aims to: firstly, to analyse whether developing
countries can further reduce child mortality by using the available resources more
parsimoniously; and secondly, to identify the (non-discretionary) socio-economic factors
that could be affecting this process. More specifically, this paper aims to explain why
some countries are more efficient than others in converting inputs (physician density and
relative total health expenditure) into a health outcome: the under-five mortality rate
(U5MR). The database used
in the estimations comprised 47 developing countries with data for the periods 2000-
2004, 2005-2009, and 2010-2012. The findings suggest that greater efficiency in the
provision of immunization, better quality government, and lower income inequality are
directly related to efficiency in the use of inputs to reduce the U5MR.
