INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
Economic Theories and the Health Market: A Look at David  
Ricardo's Theory in the Context of Health Economics in  
Mozambique  
Criscêncio Luís Sande Botão  
Faculty of Health Sciences, Zambezi University  
DOI : https://doi.org/10.51583/IJLTEMAS.2025.1411000062  
Received: 26 November 2025; Accepted: 01 December 2025; Published: 09 December 2025  
ABSTRACT  
This article focuses on the Economic Theory of the Health Market, based on the contributions generated by  
David Ricardo's Economic Theory, commonly known as Ricardian Theory, which for this article will be  
referred to as Ricardian Economics (RE). Methodologically, documentary research was carried out, using  
Google Scholar, open websites and academic institutions, based on the search for keywords such as Ricardian  
theory, health market. It was also possible to visit articles and dissertations, which allowed us to verify that RE  
cannot find a standard capable of measuring the value of all things [a fact that can be inferred in the analysis of  
the health market, through health economics] and that the market has its specificities to respect in order to  
implement a particular economic policy.  
Keywords: Economic Theories, Ricardian Economics, Healthcare Market  
INTRODUCTION  
More than 200 years later, “David Ricardo’s thought remains vigorous, appearing in many of its aspects in  
economics textbooks [including Health Economics-HE]” (Silva, 2003).  
However, the economic approach emphasized by Ricardo (which in this article we will call Ricardian  
Economics-RE) addresses, among other things, the economic segments that involve taxation and, as a concrete  
case, the non-protectionism of the state, such as that of cereals imposed by the British Government; the theory  
of comparative advantage (also addressed by Adam Smith), the theory of stagnation, among others.  
Therefore, relating ER to the healthcare market—through ES, the latter having unique specificities in which  
competition is not called upon, namely, the irregularity of service demand, the unpredictability of service  
demand, and the considerable probability of reduced personal integrity (Souza, 2021)—proves to be a  
challenge, measured by the aspects to which Ricardian theories are entitled, since, according to Santere and  
Neu (2010), health economics bases its economic principles on several subdisciplines [including Ricardian  
economics].  
Given that his work marks the appearance of economics as a fully constituted science with object and method  
(Holanda, 1996:5, cited in Silva, 2003), it is clear to seek a better understanding of Ricardian interference in  
ES, and for this purpose, the research adopted a qualitative methodology using the technique of bibliographic  
review of books, articles, and dissertations. Similarly, documentary research was conducted online, using  
official government websites and public websites.  
Problem  
In his approach to “Institutional conditions of Ricardo’s time and the influences he suffered,” Silva (2003),  
citing Ricardo’s book entitled “Principles of Political Economy and Taxation,” emphasizes that Ricardo,  
drawing on the ideas and contributions of Adam Smith, Jean-Baptiste Say, and Thomas Malthus, discusses his  
www.ijltemas.in  
Page 676  
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
reflections on different points of economics, highlighting the elaboration of the labor theory of value and  
comparative advantage.  
From this perspective, it supports the discussion of ER and its influence on ES, in terms of being  
comprehensive from a methodological standpoint and doing justice to some of the theories presented, when it  
evokes, for example, the non-interference and/or protectionism of the state regarding goods and services (in  
the case of cereals), since, as it argues, the role of the state should be that of a facilitator, therefore, the  
compression of the health market from the perspective of ES, as Matias (1995) argues, must address 3  
fundamental components: i) the object of choice, which in this case consists of the good health care; ii) the  
behavior of the demand agent, which here is the patient; iii) the behavior of the supply agent, which here will  
be the health sector professionals, namely doctors, nurses, hospital administrators and other support staff, so  
the statement that supply generates its own demand (Ricardo, 1976) conveys this objective.  
Viewed from the perspective above, the question that arises aims to discuss the methodological foundations of  
David Ricardo and their application in the field of the Mozambican health market through ES.  
David Ricardo's Contributions to Modern Economics  
Silva (2003) states that, from an ideological point of view, Ricardo was influenced by the ideals of liberty,  
equality, and fraternity of the French Revolution. Moreover, not only Ricardo, but some sectors of the  
European elites harbored a certain sympathy for the conflict, notably for its insurgency against the absolutist  
and aristocratic tradition. The new phase of capitalism, now asserting itself, required the materialization of  
these ideals.  
From an intellectual standpoint, considering the influence he received from Smith, Ricardo, to a greater or  
lesser degree, directly or indirectly, also received influence from other economists of his time. A contemporary  
of Thomas Malthus, Ricardo accepted the theory of population and even Malthus's ideas regarding workers  
and the causes of poverty. But, regardless of the weight of these points in common, both were intellectual  
adversaries with marked disagreements. This relationship, however, always remained confined to the realm of  
ideas, since the two maintained deep friendships and mutual admiration throughout their lives.  
Therefore, it follows from the above statements that Ricardo was open to analyzing even divergent economic  
fields, in order to reach a consensus on differences without ceasing to consider opposing ideas. For this reason,  
Luna (2021) highlights the fact that Ricardo not only adopted but also perfected Jean-Baptiste Say's  
assumption, which essentially stated that supply generates its own demand, thus making the hypothesis of a  
systemic crisis inadmissible. This phenomenon would therefore be circumstantial and possible only in  
particular sectors, never in the economy as a whole. If the price of a commodity increased, the extraordinary  
profits offered by the sector in question would attract capitalists seeking to seize the opportunity. The larger  
number of producers in that market segment would reduce profits, causing the rate to return to an average rate.  
Ricardo's Labor Theory of Value  
In the Ricardian analytical scheme, the theory of value occupies a central position, even though Ricardo  
himself affirmed its priority in relation to the distribution of income among social classes. Unlike Smith, in his  
reflections on value, Ricardo's purpose was to understand the effects of variations in relative prices on income  
distribution, and the impacts of this on economic growth (Silva, 2003).  
Therefore, it is understood that simultaneously or in parallel, while the income redistribution process should  
prioritize the most disadvantaged, price variations related to income distribution should be evaluated from the  
perspective of improving the population's quality of life.  
According to Sandroni (1995), Ricardo improved Smith's labor theory of value, which is nothing more than a  
theory of production costs, by perceiving a series of logical inconsistencies in it. The costs of production (land,  
labor, and capital), of an incommensurable and heterogeneous nature, can only be added together if reduced to  
a common denominator. However, as Smith himself had already observed, reducing them to their monetary  
www.ijltemas.in  
Page 677  
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
value was not at all the adequate solution. It was necessary, rather, to identify what made them equivalent in  
money. And this is the starting point of Ricardo's analysis of economic value.  
According to Silva (2003), the value of goods could be expressed in monetary terms and broken down into  
production costs which, in turn, could be expressed in terms of the human labor employed in their production.  
However, before constructing his theory of value, Ricardo classifies goods according to their possibility of  
reproduction. There would therefore be two distinct categories of goods: a) Goods susceptible to limited  
reproduction, whose value is regulated by their rarity, thus fluctuating according to supply and demand, never  
reaching a point of equilibrium. Works of art, old wines, rare jewels, etc., fall into this category. The value of  
these goods is regulated solely by their scarcity; b) Goods of unlimited reproduction, whose value is regulated  
by their production cost, according to a general law and whose price revolves around a point of equilibrium.  
This category includes all sorts of goods that society can reproduce in series, despite the scarcity of resources.  
And that is where Ricardo concludes: possessing utility, commodities derive their exchange value from two  
basic sources: their scarcity and the amount of labor necessary to obtain them (Silva, 2003).  
In this vein, Nunes et al. (1982) refer that, using the same Ricardian approach, the market aspect of health  
shows that the specificities have been recognized for a long time, and the main differences in medical care in  
relation to traditional economic analysis would be: (i) the irregular and unpredictable nature of demand, (ii) the  
total identification between the product and the production activity of medical care, (iii) the uncertainty  
regarding the product, (iv) the non-mobility of the factors of production in supply, (v) the possibility of price  
discrimination by factors such as income and (vi) the presence of indivisibility.  
According to Silva (2003), Ricardo argues that these exceptions to the labor theory of value do not cause  
significant changes in how the product is distributed among classes, nor do they have significant effects on  
capital accumulation. Nevertheless, the general law deduced by Ricardo does not lose its validity in the face of  
these exceptions. After all, the economist can be compared to a photographer who seeks to portray the reality  
that surrounds him, although he can never do so in its full complexity. The important thing is, in fact, to  
capture the core of the issues studied. And Ricardo did this masterfully.  
According to Sandroni (1995), Ricardo is unable to find a standard capable of measuring the value of all  
things. The question therefore remains open.  
It is worth noting that the Ricardian view of value coincides with Smith's regarding the "natural" price of the  
commodity. Despite the additions to the theory, Ricardo aligned himself with Smith regarding the issue of  
nominal prices revolving around a natural value.  
The Theory of Comparative Advantage from a Ricardian Perspective  
According to Silva (2003), the inversely proportional relationship between wages and profits was precisely the  
starting point of his theory. With the presence of protection mechanisms, especially in the agricultural sector,  
the natural tendency of the economic system was for the real prices of wage goods or subsistence goods to rise,  
with quite negative impacts on profits and, consequently, on the rate of economic growth. The economic  
policy appropriate to postponing the stationary state was based on the promotion of foreign trade; hence, his  
advocacy for the end of the Corn Laws.  
While Santere and Neun (2010) state that comparative advantages and/or generic competitiveness strategies in  
the healthcare market involve the implementation of specialized services such as those in the private sector,  
whose defense of the free market without state intervention, as advocated by Ricardo [when defending the  
elimination of the Corn Law], recommends observing competition based on cost leadership, differentiation  
strategy, and focus strategy. Luna (2021) further adds that this differentiation can manifest itself in various  
dimensions, such as the breadth of services offered, characteristics of care, functionality, quality of services,  
availability, image and reputation of the institution, sales system, and even price, among others.  
www.ijltemas.in  
Page 678  
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
The main question is to determine what the organization's focus will be, which clients it intends to serve, how  
it will participate in the sector, and what is the best way, the best strategy, for this company to achieve the best  
performance in the segment in which it operates (Luna, 2021).  
To this end, it is important that the healthcare organization has a deep understanding of itself, the segment in  
which it operates, as well as its competitors, the environment in general, and the dynamics that involve all  
these elements. With this in mind, the organization can determine the most appropriate competitive strategy for  
its success. A large part of them reaffirms its preeminence in the field of economic methodology, even  
recognizing it as the mentor of the technique of economic science (Piola & Vianna, 1995).  
Therefore, based on the aforementioned context, there are aspects that can be highlighted, namely, the breadth  
of the range of services offered and the need for healthcare to have knowledge about itself, the segment in  
which it operates, as well as its competitors. It is in this context that it is important to understand the  
parallelism between Ricardian theory and the ES (Educational System).  
Ricardian Economics and Health Economics  
Given that the appreciation and evaluation that must be undertaken when seeking to understand the influence  
of Ricardian Economics on Health Economics is the deciphering of competition based on cost leadership,  
differentiation strategy, and focus strategy (Silva, 2003), it is understood that the analysis and/or evaluation of  
Ricardian Economic Theories leads to another type of exercise, which consists of the economic analysis of  
specific goods and services, such as, for example, the cost-effectiveness analysis of a new drug, or the  
economic and financial viability of a new medical technology.  
Furthermore, for Sandroni (1996), the impact of economic development on the health level of a population, or  
even: the geographical distribution of resources dedicated to health; comparative studies between health  
systems of various countries; studies on the results of specific community intervention programs; studies on  
financing and overall health expenditure.  
The above fact relates to the ER approach, insofar as, in addition to non-protectionism, it lists the need to take  
into account the situation of the most needy (poor) to the goods and services [including health services] of the  
poor, the distribution (associated with equity) and internationalization (associated with access to what is not  
produced internally and/or based on a single production while other countries produce the rest. This was the  
example of the production and export of textiles, through the import of wine from Portugal.  
Furthermore, for Sandroni (1996), the impact of economic development on the health level of a population, or  
even: the geographical distribution of resources dedicated to health; comparative studies between health  
systems of various countries; studies on the results of specific community intervention programs; studies on  
financing and overall health expenditure.  
The above fact relates to the ER approach, insofar as, in addition to non-protectionism, it lists the need to take  
into account the situation of the most needy (poor) to the goods and services [including health services] of the  
poor, the distribution (associated with equity) and internationalization (associated with access to what is not  
produced internally and/or based on a single production while other countries produce the rest. This was the  
example of the production and export of textiles, through the import of wine from Portugal.  
According to Cruz and Manso (2011), currently, there is a preference to view health as part of the development  
process, especially when studying the organization of work and modes of production. In this sense, the role of  
the State is fundamental to explaining the evolution of health levels as an integral part of the social situation,  
and not only through its intervention in the health sector – which can result in benefits for the population and  
also present poor results. In situations of State crisis, these relationships become very evident and manifest  
themselves in crises of access, costs, and effectiveness of health services.  
More than ever, the role of the State in regulating the supply and demand of health services is fundamental.  
The health sector seems to have been forgotten, or perhaps there are those interested in maintaining the status  
www.ijltemas.in  
Page 679  
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
quo. Other tertiary sectors of the economy already have clear and efficient regulatory mechanisms (Cruz &  
Manso, 2011).  
From the perspective described above, the state's interest in understanding its economic intervention in health  
should be a regulatory forum, as is the case in a free market. Luna (2021) aligns with this understanding,  
emphasizing that for all these reasons, it is important to highlight the role of economics in studying the  
dynamics of the health services market. Health economics utilizes multidisciplinary collaboration to  
understand the meaning of health service needs and the relationships between supply and demand. It also  
recognizes that the perception of pathological processes differs for each social group, affecting and being  
affected by the behavior of these groups in each context.  
It is also important to analyze the influential role played by commercial interests, whether those of  
pharmaceutical or equipment manufacturers, the different ways in which health plans and insurance are  
presented, or the role of doctors and various types of providers in patients' decisions to consume services.  
Drawing on ER, according to Sandroni (1996), its theories influenced the conception for understanding the  
new economic approach or branch, "Health Economics," especially in the analysis of the nature of demand, the  
conditions of supply, price-related practices, physician behavior, and, with particular emphasis, uncertainty.  
The market for goods and services in the public sector has many imperfections (...) such as the induction of  
demand by supply, consumer ignorance, the unpredictability of need, externalities, and the public nature of  
goods and services (Cruz & Manso, 2011).  
Now, both Cruz and Manso, as well as Silva, Luna, and other authors who have further explored Ricardian  
theories, have emphasized that these theories, in their methodological foundation, incorporate aspects raised by  
Smith, Say, and Malthu, appreciating how the relationship between supply and demand in a free market  
contributes to economic growth and, consequently, improves social aspects, namely the health status of the  
population.  
Ricardian Economics and Health Economics in Mozambique  
As previously observed, the ER considers the relationship between supply and demand in a free market, which  
it argues can contribute to economic growth and, consequently, improve social aspects, namely the health  
status of the population. Now, when considering Health Economics in Mozambique (HEM), the primary  
underlying aspects are related to the financing of the health sector, which, among other things, is highlighted  
by the strategic guiding document on Health Sector Financing (2020-2030), with diversified and progressive  
general taxation as the main source of financing (MISAU, 2019).  
From the perspectives above, it is clear that the state needs to allow greater intervention from the private sector  
in the provision of health services, as the ER also advocates when listing the non-intervention of the state.  
On the other hand, a technical report presented by Gironés et al. (2018), related to Health Inequalities in  
Mozambique: needs, access, barriers and quality of care, revealed that, regarding access to professional health  
services, about one third of the people (interviewed in the provinces of Cabo Delgado, Maputo city, Gaza,  
Inhambane, Niassa) who perceive the need for health, are not using health services.  
The statement above shows once again that there is a need for the state to gradually allow the intervention of  
other sectors in providing more assistance, with the state only regulating.  
Final Considerations  
It was found that although ER does not provide a standard capable of measuring the value of all things [a fact  
that can be inferred from the analysis of the health market through ES], insofar as health/illness is  
immeasurable, it provides elements that enable economic actions to restore understanding of the health market.  
On the one hand, it elucidates that States should promote greater market fluidity (investments in health,  
regulation), and on the other hand, it understands that the market has its specificities to respect, namely, the  
www.ijltemas.in  
Page 680  
INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XI, November 2025  
irregularity of service demand, the unpredictability of service demand, the considerable probability of reduced  
personal integrity to implement a particular economic policy. Therefore, the Mozambican government's  
approach should be to allow more private actors to enter the provision of health services; only then will the  
motto of the Ministry of Health make sense – “the greatest value is life” (MISAU, 2011).  
BIBLIOGRAPHIC REFERENCES  
1. Da Cruz, A. I., B., e Manso, S., S., A., M., L. (2011). Saúde e Economia de Saúde. Escola Superior de  
Gestão do Instituto Politécnico de Castelo Branco.  
2. Da Silva, T., S. (2003). Notas Sobre a Economia Ricardiana.  
3. Gironés, A., L., Belvis, F., Julià, M., e Benach, J. (2018). Desigualdades em Saúde em Moçambique:  
necessidades, acesso, barreiras e qualidade de atendimento. Relatório Técnico. Barcelona.  
4. Matias, A. (1995). O mercado de cuidados de Saúde. Banco de Portugal. Portugal  
5. Nunes, A., de Almeida, A., N e Junior, L., H. (1982). As imperfeições do mercado de saúde:  
revisitando o marco teórico da Economia da Saúde. Revista Eletrônica Gestão & Saúde ISSN. Brasil.  
6. Santere, R., E., e Neun, S., P. (2010). Health Economics.Theory, Insight, and industy Study. South-  
Western, Cengage Learning. NY.  
7. Piola, S., F., e Vianna, S., M. (1995). Economia da Saúde: Conceitos e Contribuição para gestão da  
Saúde. Instituto de Pesquisa Econômica Aplicada (Ipea). Brasil  
8. Luna, E. (2021). Estratégia Competitiva nas Organizações de Saúde. [Em linha]. [consultado em 26 de  
Abril de 2023]. Disponível em http://www.hmdoctors.com/2012/estrategia-competitiva-nas-  
organizacoes-de-saude/  
9. MISAU (2019). Documento orientador estratégico Financiamento do Sector Saúde 2020-30. Maputo.  
Moçambique  
10. Sandroni, P., H., R. (1996). O Economista. David Ricardo. Princípios de economia política e tributação  
[Traduzido]. Editora Nova Cultural Ltda. São Paulo. Brasil.  
11. Souza, C., R. (2021). Economia da saúde. Origin Health Company, São Paulo, SP, Brasil  
www.ijltemas.in  
Page 681