Effects of Governance and Public Health Spending: An Empirical Evidence from a Panel-Corrected Standard Errors Approach to Improving the Quality of Life in Arab Economies

Résumé

Quality of life (QoL) in the Arab world hinges on credible institutions and effective social spending; yet evidence linking governance, health budgets, and environmental pressures remains fragmented and seldom extends beyond 2020.This study clarified these links by assembling a balanced panel of 14 Arab countries from 2000-2020 to examine how institutional quality and public health expenditure shaped QoL, while accounting for carbon emissions, economic expansion, and education expenditures.QoL is proxied by life expectancy, while institutional quality is captured through a composite index constructed by applying Principal Component Analysis to the Worldwide Governance Indicators.The analysis employed country-and year-fixed effects, along with panelcorrected standard errors (PCSE), to address heteroskedasticity and cross-sectional dependence.Results indicated that institutional quality was the dominant driver as the composite index was strongly associated with higher QoL (β = 1.843, p < .01).Health expenditure was also crucial though the effect was economically small (β ≈ 0.0063, p < .05).Education expenditure was weakly negative (p < .10),thus reflecting quality and governance constraints in the education sector.Carbon emissions displayed a small positive coefficient (β ≈ 0.0949, p < .05),which likely implied policy and structural weaknesses rather than genuine welfare gains.Moreover, GDP per capita exhibited a statistically significant yet negligible and slightly negative elasticity (≈-0.000124),indicating rent-dependent growth that failed to translate into improved well-being.Collectively, the findings imply that governance reforms yield the greatest QoL, whereas spending without institutional credibility produces limited returns.Future work should test interaction effects, explore thresholds, and incorporate subjective QoL metrics to guide the sequencing of reforms across Gulf Cooperation Council (GCC) and non-GCC settings.

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