Health expenditure and economic growth in post-Soviet Uzbekistan: ARDL evidence from a transition economy (2000–2022)

Abstract

This study provides the first econometric examination of the health expenditure–economic growth nexus in Uzbekistan, Central Asia’s most populous economy, over 2000–2022. Using ARDL bounds testing, Granger and Toda–Yamamoto causality analysis, and endogenous structural-break tests, and treating the small sample (T = 23) explicitly through parsimonious specification and wild-bootstrap inference, we test whether health investment drives growth in a post-Soviet transition setting. Our central result is robust across specifications, lag lengths, and small-sample-corrected critical values: health expenditure does not Granger-cause economic growth. The direction of association runs the other way. Growth, supported by trade revenue, Granger-precedes public health expenditure, consistent with health behaving as a normal good financed by rising income rather than as an engine of it. We find no long-run relationship that survives parsimonious specification and small-sample correction, and interpret the evidence cautiously. These findings question the health-led-growth premise underlying much development assistance to the region, and align with a threshold interpretation in which health spending becomes growth-enhancing only once institutional, educational, and structural prerequisites are met. That interpretation is supported by neighbouring economies, where income from resources or remittances has tended to finance health rather than the reverse.