Does Macroeconomic Instability Undermine Infectious Disease Prevention? Evidence from HIV/AIDS and Tuberculosis in Developing Countries

Developing countries continue to experience recurrent macroeconomic instabilities, characterized by growth volatility, fiscal imbalances, high inflation, and rising public debt, which collectively weaken governments’ capacity to sustainably finance health systems and effectively implement infectious disease prevention strategies. This study examines the impact of such instabilities on the prevention of HIV/AIDS and tuberculosis—two major sources of morbidity and mortality—using a panel dataset covering 150 countries over the period 2000–2023. To address key econometric challenges, including endogeneity, unobserved heterogeneity, and the dynamic nature of health outcomes, the analysis relies on the System Generalized Method of Moments (System GMM) estimator. The empirical findings reveal a significant and negative relationship between macroeconomic instability and the effectiveness of preventive health efforts, showing that periods of instability lead to reduced public health investments, weakened implementation of prevention programs, and increased population vulnerability to infectious diseases. By providing an integrated empirical framework that connects macroeconomic conditions with health outcomes, this study contributes to bridging the gap between macroeconomic and health economics literature. It also offers important policy implications, emphasizing the need to strengthen macroeconomic stability, ensure predictable and sustained health financing, and enhance the resilience and governance of health systems in order to improve the effectiveness and sustainability of infectious disease prevention strategies in developing countries. JEL Classification : I18, O11, C23