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Decentralisation of health care and its impact on health outcomes

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  • Dolores Jimenez
  • Peter C Smith

Abstract

This paper explores the impact of health care decentralisation on a characteristic of human development: the overall level of a population's health. While much of the literature on decentralisation in health care has stressed the advantages of sub national provision of health services, in the absence of a quantitative measure of the magnitude of the effect of decentralisation, there is little that can be said in terms of its benefits and costs for the health sector. The purpose of this study is therefore to contribute to the limited empirical literature on this issue by investigating the hypothesis that shifts towards more decentralisation would be accompanied by improvements in population health. The analysis draws on a theoretical model of local government's public finance applied to health. We use the ten provinces of Canada as a case study. Apart from being one of the most decentralised countries in the world, Canadian data required to estimate our model was found to be one of the best. The results of the empirical analysis suggest that decentralisation in Canada has had a positive and substantial influence on the effectiveness of public policy in improving population's health.

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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 05/10.

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Handle: RePEc:yor:yorken:05/10

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Keywords: Fiscal decentralisation; health outcomes; Canada;

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  1. 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.
  2. Filmer, Deon & Pritchett, Lant, 1997. "Child mortality and public spending on health : how much does money matter?," Policy Research Working Paper Series 1864, The World Bank.
  3. John Akin & Paul Hutchinson & Koleman Strumpf, 2005. "Decentralisation and government provision of public goods: The public health sector in Uganda," Journal of Development Studies, Taylor & Francis Journals, vol. 41(8), pages 1417-1443.
  4. Nadir Habibi & Cindy Huang & Diego Miranda & Victoria Murillo & Gustav Ranis & Mainak Sarkar & Frances Stewart, 2001. "Decentralization in Argentina," Working Papers 825, Economic Growth Center, Yale University.
  5. Khaleghian, Peyvand, 2003. "Decentralization and public services : the case of immunization," Policy Research Working Paper Series 2989, The World Bank.
  6. Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
  7. Rodden, Jonathan, 2003. "Reviving Leviathan: Fiscal Federalism and the Growth of Government," International Organization, Cambridge University Press, vol. 57(04), pages 695-729, September.
  8. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," North American Stata Users' Group Meetings 2003 05, Stata Users Group.
  9. Oates, Wallace E., 1993. "Fiscal Decentralization and Economic Development," National Tax Journal, National Tax Association, vol. 46(2), pages 237-43, June Cita.
  10. S. Illeris & G. Akehurst, 2001. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 21(1), pages 1-4, January.
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