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Fiscal Decentralization, Chinese Style: Good for Health Outcomes?

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  • Uchimura, Hiroko
  • Jütting, Johannes P.

Abstract

Summary This study analyzes the effect of fiscal decentralization on health outcomes in China using a panel data set with nationwide county-level fiscal data. We find that more fiscally decentralized provinces have lower infant mortality rates than provinces that are the main spending authority, if certain conditions are met. Key among those conditions are the county governments' own fiscal capacity and intergovernmental transfers. Local spending responsibilities need to be matched with county governments' own fiscal capacity. When the county's government relative spending responsibility is held constant, the ability to spend on local public goods and health outcomes depend upon intergovernmental transfers.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 37 (2009)
Issue (Month): 12 (December)
Pages: 1926-1934

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Handle: RePEc:eee:wdevel:v:37:y:2009:i:12:p:1926-1934

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Web page: http://www.elsevier.com/locate/worlddev

Related research

Keywords: fiscal decentralization health outcomes Asia China;

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References

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  1. Bird, Richard M., 1993. "Threading the Fiscal Labyrinth: Some Issues in Fiscal Decentralization," National Tax Journal, National Tax Association, vol. 46(2), pages 207-27, June.
  2. International Monetary Fund, 2002. "Moreon the Effectiveness of Public Spendingon Health Care and Education," IMF Working Papers 02/90, International Monetary Fund.
  3. Xiaobo Zhang & Ravi Kanbur, 2004. "Spatial Inequality in Education and Health Care in China," Working Papers 159, Institute for Social and Economic Change, Bangalore.
  4. Jorge Martinez-Vazquez & Baoyun Qiao & Shuilin Wang & Heng-fu Zou, 2008. "Expenditure Assignments in China: Challenges and Policy Options, Public Finance," CEMA Working Papers 329, China Economics and Management Academy, Central University of Finance and Economics.
  5. Era Dabla-Norris, 2005. "Issues in Intergovernmental Fiscal Relations in China," IMF Working Papers 05/30, International Monetary Fund.
  6. Filmer, Deon & Pritchett, Lant, 1999. "The impact of public spending on health: does money matter?," Social Science & Medicine, Elsevier, vol. 49(10), pages 1309-1323, November.
  7. Zhang, Xiaobo, 2006. "Fiscal decentralization and political centralization in China: Implications for growth and inequality," Journal of Comparative Economics, Elsevier, vol. 34(4), pages 713-726, December.
  8. de Mello, Luiz Jr, 2000. "Fiscal Decentralization and Intergovernmental Fiscal Relations: A Cross-Country Analysis," World Development, Elsevier, vol. 28(2), pages 365-380, February.
  9. Oates, Wallace E, 1985. "Searching for Leviathan: An Empirical Study," American Economic Review, American Economic Association, vol. 75(4), pages 748-57, September.
  10. Robalino, David A. & Picazo, Oscar F. & Voetberg, Albertus, 2001. "Does fiscal decentralization improve health outcomes? - evidence from a cross-country analysis," Policy Research Working Paper Series 2565, The World Bank.
  11. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
  12. Hehui Jin & Yingyi Qian & Barry Weingast, 1999. "Regional Decentralization and Fiscal Incentives: Federalism, Chinese Style," Working Papers 99013, Stanford University, Department of Economics.
  13. Jing Jin & Heng-fu Zou, 2004. "Fiscal decentralization, revenue and expenditure assignments, and growth in China," CEMA Working Papers 169, China Economics and Management Academy, Central University of Finance and Economics.
  14. Tochkov, Kiril, 2007. "Interregional transfers and the smoothing of provincial expenditure in China," China Economic Review, Elsevier, vol. 18(1), pages 54-65.
  15. International Monetary Fund, 2004. "Toward More Effective Redistribution," IMF Working Papers 04/98, International Monetary Fund.
  16. Emanuele Baldacci & Maria Teresa Guin-Siu & Luiz De Mello, 2003. "More on the effectiveness of public spending on health care and education: a covariance structure model," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(6), pages 709-725.
  17. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
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Citations

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Cited by:
  1. Jiménez-Rubio, Dolores, 2011. "The impact of fiscal decentralization on infant mortality rates: Evidence from OECD countries," Social Science & Medicine, Elsevier, vol. 73(9), pages 1401-1407.
  2. Wu, Alfred M. & Wang, Wen, 2013. "Determinants of Expenditure Decentralization: Evidence from China," World Development, Elsevier, vol. 46(C), pages 176-184.

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