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On the cost-benefit of the regionalisation of the National Health Service


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  • Alessandro Petretto


In this paper we analyse in formal terms the desirability of the regionalisation of a National Health Service. The policy consists of a devolution process, i.e. the increase in the health services provision to be decided by a region and financed by an increase in its revenues. The change is a marginal one, as it regards the part of supply of the health services exceeding a minimum standard, which for purposes of equity is maintained uniform in the national territory. As the central government is responsible for this component of the provision of health care (a federal “mandate”), the level of the said component is chosen by this authority and financed by federal taxation. Moreover, the government also applies an equalisation scheme based on the difference between a standard level of tax revenues and the revenues which the region is deemed able to raise for this purpose. Within the theoretical context of welfare improving reforms with distortionary taxation, we derive two conditions which focus on the regional, as well as the social, convenience of regionalisation. Copyright Springer-Verlag Berlin Heidelberg 2000

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Bibliographic Info

Article provided by Springer in its journal Economics of Governance.

Volume (Year): 1 (2000)
Issue (Month): 3 (December)
Pages: 213-232

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Handle: RePEc:spr:ecogov:v:1:y:2000:i:3:p:213-232

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Keywords: Key words: National Health Service; fiscal federalism; intergovernmental grants; marginal cost and benefit of public funds; JEL classification: H21; H71; H77; I18;

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Cited by:
  1. Kurt R. Brekke & Rosella Levaggi & Luigi Siciliani & Odd Rune Straume, 2011. "Patient Mobility, Health Care Quality and Welfare," NIPE Working Papers 26/2011, NIPE - Universidade do Minho.
  2. Lisa Grazzini & Alessandro Petretto, 2006. "Vertical Tax Competition with Tax Sharing and Equalization Grants," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 65(1), pages 75-94, May.
  3. Rosella Levaggi & Francesco Menoncin, 2013. "Soft budget constraints in health care: evidence from Italy," The European Journal of Health Economics, Springer, vol. 14(5), pages 725-737, October.


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