Modelling the economic and health impacts of crises: a system dynamics analysis of health and military investments across income groups

Abstract

This study uses a calibrated system-dynamics model to compare the economic and health implications of health-system and military expenditure during crises across high-, middle-, and low-income countries. Annual data for 180 countries cover 1990–2024; the model was calibrated over 1990–2019 and evaluated out of sample over 2020–2024. We simulated four policy paths for 2025–2044: baseline expenditure, a 20% increase in health expenditure (Health + ), a 20% increase in military expenditure (Military + ), and simultaneous increases in both (Combined). Outcomes include cumulative economic damage, disability-adjusted life years (DALYs), GDP growth, public debt and incremental net monetary benefit (INMB). Under the specified model assumptions, Health + produced lower simulated economic damage and DALY burdens than Military + in each income group. In high-income countries, simulated economic damage was 19.2% below baseline under Health+, compared with 9.8% under Military + ; Combined produced a 22.9% reduction. The direction of the comparison was similar in middle- and low-income groups, although the estimated gains were smaller. Using population-scaled DALYs and income-specific willingness-to-pay thresholds, the INMB ranking was Combined > Health + > Military + > Baseline. The findings support examining sustained civilian health-system capacity as a central component of crisis preparedness, with military logistical resources considered a conditional complement rather than a substitute. These are scenario-based comparisons, not causal estimates of spending effects.