Date of Award

Spring 2021

Degree Type



Moore School of Business

Director of Thesis

Dr. Hildy Teegen

Second Reader

Dr. Robert Gonzalez


Africa suffers from the highest disease burden in the world, with over half of the population lacking regular access to essential medicines (Owoeye, 2014, p.214; Chaudhuri & West, 2015, p.23). Following two decades of reform, the continent has now emerged one of the fastest-growing economic regions, shifting public health focus toward non-communicable diseases (NCDs) (Holt et al., 2015, p.2). Among these NCDs is anemia, which has direct and indirect economic effects as large as 4.05% of GDP (Horton & Ross, 2003, p.51). Encouraged by the rapid growth of liberalized markets, African governments and health officials are now considering local pharmaceutical production as a way to unlock the economic, social, and political benefits of improved public health. This thesis explores two hypotheses: (a) tax incentives effectively induce greater foreign direct investment in East Africa, including pharmaceutical production, and (b) local pharmaceutical production in East Africa provides better access to essential medicines like haematinics (anti-anemia drugs) as measured by anemia prevalence in children under five. We study these questions using Ethiopia and Rwanda as representative countries. Taking effect in 2012, Ethiopia’s Double Taxation Avoidance Agreement (DTAA) with India created local investment incentives via low tax rates as compared to Rwanda, which has no such agreement. We perform a difference-in-differences (DID) regression using data from Demographic and Health Surveys (DHS) to estimate the causal relationship between favorable investment conditions and anemia rates among children. Our results are inconclusive and suggest determinants of anemia are numerous and interconnected.

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