The impacts of development finance for climate on public health outcomes and life satisfaction: evidence from developing countries in the global south.

This study assesses how development finance for climate (DFC) affects public health outcomes and life satisfaction in developing countries across the global south (GS), using panel data for 69 developing countries from 2011 to 2021. The instrumental-variable generalized method of moments (IV-GMM) is used to address endogeneity. Several alternative approaches are used for robustness analysis. The findings provide robust evidence that increased DFC is positively associated with improvements in public health outcomes and life satisfaction in developing countries in the GS. More specifically, a 1% increase in DFC is associated with a 0.025% decrease in the crude death rate and a 0.047-point increase in the life satisfaction score, suggesting that increasing DFC to promote climate resilience and mitigation yields broader wellbeing gains beyond environmental benefits for developing countries in the GS. Moreover, heterogeneity analyses indicate that the positive effects of DFC on public health and life satisfaction are more pronounced among developing countries with low health expenditure and greater exposure to environmental risks. Additionally, the effects of DFC on public health and life satisfaction vary across income groups: middle-income countries are better able to leverage DFC to improve public health outcomes and life satisfaction than low-income developing countries. Finally, crude death rate has a significant and partial mediation role in the link between DFC and life satisfaction. Therefore, the results provide multifaceted evidence of DFC's effects on the health and social wellbeing of developing countries in the GS and offer important policy recommendations aligned with SDG-3.