The Growth and Development Effects of Public Education, Health, and Welfare Spending in ASEAN

Abstract

Most ASEAN economies allocate a relative large share of government spending to education, health, and welfare services. Education, health, and welfare spending as a percentage of total spending has been increasing over time in all major ASEAN economies. Despite this increase in the shares of education, health, and welfare spending, very little study has been geared toward an explanation of the growth and the development effects of the spending particularly in the context of the ASEAN economies. The objective of this paper is, first, to examine factors affecting the growth of public spending on education, health, and welfare in ASEAN countries. Second, the paper also explores the relationship between public spending on education, health and welfare, on the one hand, and indicators of access to education and health services and other social outcomes on the other. It is found that transition to democracy, greater openness to international trade and economic growth in most major ASEAN countries tended to give strong incentives to greater attention on social policy and issues. This expansion of the social commitments, in turn, tended to be an important tool for improving the quality of life and income of the population. Finally, the paper also explores policy implications of the findings.