Fiscal Space for Health in the Age of COVID-19: Did Binding Constraints Relax or Tighten in Low- and Middle-Income Countries?

Fiscal Space for Health in the Age of COVID-19: Did Binding Constraints Relax or Tighten in Low- and Middle-Income Countries? | Authorea try { document.documentElement.classList.add('js'); } catch (e) { } var _gaq = _gaq || []; _gaq.push(['_setAccount', 'G-8VDV14Y67G']); _gaq.push(['_trackPageview']); (function() { var ga = document.createElement('script'); ga.type = 'text/javascript'; ga.async = true; ga.src = ('https:' == document.location.protocol ? 'https://ssl' : 'http://www') + '.google-analytics.com/ga.js'; var s = document.getElementsByTagName('script')[0]; s.parentNode.insertBefore(ga, s); })(); Skip to main content Preprints Collections Wiley Open Research IET Open Research Ecological Society of Japan All Collections About About Authorea FAQs Contact Us Quick Search anywhere Search for preprint articles, keywords, etc. Search Search ADVANCED SEARCH SCROLL This is a preprint and has not been peer reviewed. Data may be preliminary. 25 December 2025 V1 Latest version Share on Fiscal Space for Health in the Age of COVID-19: Did Binding Constraints Relax or Tighten in Low- and Middle-Income Countries? Author : Mohamed Chakroun 0000-0002-6801-9344 [email protected] Authors Info & Affiliations https://doi.org/10.22541/au.176668757.79798861/v1 142 views 117 downloads Contents Abstract Supplementary Material Information & Authors Metrics & Citations View Options References Figures Tables Media Share Abstract We examine whether the COVID-19 pandemic enabled low- and middle-income countries (LMICs) to expand fiscal space for health through domestic revenue mobilization, or whether binding fiscal constraints limited health financing responses despite unprecedented system-wide pressures. Using panel data for 85 countries over 2015–2022 and system-GMM estimation, we find that taxation capacity positively affects government health expenditure, confirming fiscal space as the binding constraint on health financing. Critically, the pandemic did not systematically alter this relationship. However, we document substantial heterogeneity masked by this null average effect. Low- and lower-middle-income countries that implemented tax reforms during 2020–2021 sustained health expenditure increases through 2022, whereas countries relying on deficit financing experienced spending reversals. Upper-middle-income countries show no pandemic strengthening of the fiscal space-health relationship. These findings challenge the conventional view that health crises automatically generate political will sufficient to overcome fiscal constraints, demonstrating instead that administrative capacity to expand revenue determines whether reform windows translate into sustainable financing. For universal health coverage strategies, the results imply that building tax administration capacity during normal periods constitutes essential crisis preparation, as robust collection infrastructure cannot be rapidly developed amid sudden economic shocks. Supplementary Material File (fiscal space for health2.pdf) Download 323.43 KB Information & Authors Information Version history V1 Version 1 25 December 2025 Copyright This work is licensed under a Non Exclusive No Reuse License. Keywords fiscal space health financing low- and middle-income countries system-gmm taxation capacity Authors Affiliations Mohamed Chakroun 0000-0002-6801-9344 [email protected] German University of Technology in Oman View all articles by this author Metrics & Citations Metrics Article Usage 142 views 117 downloads .FvxKWukQNSOunydq8rnd { width: 100px; } Citations Download citation Mohamed Chakroun. Fiscal Space for Health in the Age of COVID-19: Did Binding Constraints Relax or Tighten in Low- and Middle-Income Countries?. Authorea . 25 December 2025. DOI: https://doi.org/10.22541/au.176668757.79798861/v1 If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download. For more information or tips please see 'Downloading to a citation manager' in the Help menu . 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