IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v30y2021i10p2323-2344.html
   My bibliography  Save this article

The effects of health spending on the propagation of infectious diseases

Author

Listed:
  • Marcelo Castro
  • Enlinson Mattos
  • Fernanda Patriota

Abstract

We explore the discontinuity in the allocation of the main federal grant to Brazilian municipalities to identify the local effects of health spending and the spillovers into the bordering jurisdictions. Fiscal reactions are asymmetric: small neighbors reduce health spending, while we do not find a significant budgetary response in the largest neighbor. Our results suggest a reduction in the spread of infectious diseases in the neighbors, with fewer residents hospitalized with gastrointestinal infections. In addition, the elderly demand less hospitalization in the largest bordering jurisdictions due to respiratory infectious diseases. Finally, we find a direct and significant reduction in infant mortality, consistent with the observed pediatricians' increase, while the spillover effects on neighbors' mortality rates are not conclusive.

Suggested Citation

  • Marcelo Castro & Enlinson Mattos & Fernanda Patriota, 2021. "The effects of health spending on the propagation of infectious diseases," Health Economics, John Wiley & Sons, Ltd., vol. 30(10), pages 2323-2344, September.
    • Handle: RePEc:wly:hlthec:v:30:y:2021:i:10:p:2323-2344
    DOI: 10.1002/hec.4388
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/hec.4388
    Download Restriction: no
    File URL: https://libkey.io/10.1002/hec.4388?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bladimir Carrillo & Jose Feres, 2019. "Provider Supply, Utilization, and Infant Health: Evidence from a Physician Distribution Policy," American Economic Journal: Economic Policy, American Economic Association, vol. 11(3), pages 156-196, August.
    2. Mickael Bech & Jørgen Lauridsen, 2009. "Exploring spatial patterns in general practice expenditure," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 10(3), pages 243-254, July.
    3. Fernanda Brollo & Tommaso Nannicini & Roberto Perotti & Guido Tabellini, 2013. "The Political Resource Curse," American Economic Review, American Economic Association, vol. 103(5), pages 1759-1796, August.
    4. Timothy Goodspeed, 2002. "Bailouts in a Federation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(4), pages 409-421, August.
    5. Romero Rocha & Rodrigo R. Soares, 2010. "Evaluating the impact of community‐based health interventions: evidence from Brazil's Family Health Program," Health Economics, John Wiley & Sons, Ltd., vol. 19(S1), pages 126-158, September.
    6. Jorge Leandro Delconte Ferreira & Alexandre Florindo Alves & Emilie Caldeira, 2018. "Elections and externalities of health expenditures," Post-Print hal-02023263, HAL.
    7. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    8. Andrés Rodríguez-Pose & Roberto Ezcurra, 2010. "Does decentralization matter for regional disparities? A cross-country analysis," Journal of Economic Geography, Oxford University Press, vol. 10(5), pages 619-644, September.
    9. Molly Lipscomb & Ahmed Mushfiq Mobarak, 2017. "Decentralization and Pollution Spillovers: Evidence from the Re-drawing of County Borders in Brazil," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(1), pages 464-502.
    10. Lucie Gadenne, 2017. "Tax Me, but Spend Wisely? Sources of Public Finance and Government Accountability," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 274-314, January.
    11. Raphael Corbi & Elias Papaioannou & Paolo Surico, 2019. "Regional Transfer Multipliers," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(5), pages 1901-1934.
    12. Jorge Ferreira & Alexandre Alves & Emilie Caldeira, 2016. "Elections and externalities of health expenditures: Spatial patterns and opportunism in the local budget allocation," ERSA conference papers ersa16p933, European Regional Science Association.
    13. Jorge Leandro Delconte Ferreira & Alexandre Florindo Alves & Emilie Caldeira, 2018. "Elections and externalities of health expenditures," Post-Print hal-02014075, HAL.
    14. Mattos, Enlinson & Mazetto, Debora, 2019. "Assessing the impact of more doctors’ program on healthcare indicators in Brazil," World Development, Elsevier, vol. 123(C), pages 1-1.
    15. Juliet Bedford & Jeremy Farrar & Chikwe Ihekweazu & Gagandeep Kang & Marion Koopmans & John Nkengasong, 2019. "A new twenty-first century science for effective epidemic response," Nature, Nature, vol. 575(7781), pages 130-136, November.
    16. Moscone, Francesco & Knapp, Martin & Tosetti, Elisa, 2007. "Mental health expenditure in England: A spatial panel approach," Journal of Health Economics, Elsevier, vol. 26(4), pages 842-864, July.
    17. Arzaghi, Mohammad & Henderson, J. Vernon, 2005. "Why countries are fiscally decentralizing," Journal of Public Economics, Elsevier, vol. 89(7), pages 1157-1189, July.
    18. Gallet, Craig A. & Doucouliagos, Hristos, 2017. "The impact of healthcare spending on health outcomes: A meta-regression analysis," Social Science & Medicine, Elsevier, vol. 179(C), pages 9-17.
    19. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(2), pages 269-304, June.
    20. Veronica Grembi & Tommaso Nannicini & Ugo Troiano, 2016. "Do Fiscal Rules Matter?," American Economic Journal: Applied Economics, American Economic Association, vol. 8(3), pages 1-30, July.
    21. Dolores Jiménez‐Rubio & Peter C. Smith & Eddy Van Doorslaer, 2008. "Equity in health and health care in a decentralised context: evidence from Canada," Health Economics, John Wiley & Sons, Ltd., vol. 17(3), pages 377-392, March.
    22. Francesco Moscone & Elisa Tosetti & Martin Knapp, 2007. "Sur model with spatial effects: an application to mental health expenditure," Health Economics, John Wiley & Sons, Ltd., vol. 16(12), pages 1403-1408.
    23. José‐Luis Fernandez & Julien Forder, 2015. "Local Variability in Long‐Term Care Services: Local Autonomy, Exogenous Influences and Policy Spillovers," Health Economics, John Wiley & Sons, Ltd., vol. 24(S1), pages 146-157, March.
    24. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    25. Litschig, Stephan, 2012. "Are rules-based government programs shielded from special-interest politics? Evidence from revenue-sharing transfers in Brazil," Journal of Public Economics, Elsevier, vol. 96(11), pages 1047-1060.
    26. José‐Luis Fernandez & Julien Forder, 2015. "Local Variability in Long‐Term Care Services: Local Autonomy, Exogenous Influences and Policy Spillovers," Health Economics, John Wiley & Sons, Ltd., vol. 24(S1), pages 146-157, March.
    27. Yihua Yu & Li Zhang & Fanghua Li & Xinye Zheng, 2013. "Strategic interaction and the determinants of public health expenditures in China: a spatial panel perspective," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(1), pages 203-221, February.
    28. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
    29. Edward Miguel & Michael Kremer, 2004. "Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities," Econometrica, Econometric Society, vol. 72(1), pages 159-217, January.
    30. Stephan Litschig & Kevin M. Morrison, 2013. "The Impact of Intergovernmental Transfers on Education Outcomes and Poverty Reduction," American Economic Journal: Applied Economics, American Economic Association, vol. 5(4), pages 206-240, October.
    31. Atella, Vincenzo & Belotti, Federico & Depalo, Domenico & Piano Mortari, Andrea, 2014. "Measuring spatial effects in the presence of institutional constraints: The case of Italian Local Health Authority expenditure," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 232-241.
    32. Saavedra, Luz Amparo, 2000. "A Model of Welfare Competition with Evidence from AFDC," Journal of Urban Economics, Elsevier, vol. 47(2), pages 248-279, March.
    33. Andrew C. Eggers & Ronny Freier & Veronica Grembi & Tommaso Nannicini, 2018. "Regression Discontinuity Designs Based on Population Thresholds: Pitfalls and Solutions," American Journal of Political Science, John Wiley & Sons, vol. 62(1), pages 210-229, January.
    34. Jorge Leandro Delconte Ferreira & Alexandre Florindo Alves & Emilie Caldeira, 2018. "Elections and externalities of health expenditures," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 45(6), pages 1124-1144, November.
    35. Francesco Moscone & Elisa Tosetti & Martin Knapp, 2007. "Sur model with spatial effects: an application to mental health expenditure," Health Economics, John Wiley & Sons, Ltd., vol. 16(12), pages 1403-1408, December.
    36. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-209, January.
    37. Luiz Felipe Campos Fontes & Otavio Canozzi Conceição & Paulo de Andrade Jacinto, 2018. "Evaluating the impact of physicians' provision on primary healthcare: Evidence from Brazil's More Doctors Program," Health Economics, John Wiley & Sons, Ltd., vol. 27(8), pages 1284-1299, August.
    38. Soto, Victoria Eugenia & Farfan, Maria Isabel & Lorant, Vincent, 2012. "Fiscal decentralisation and infant mortality rate: The Colombian case," Social Science & Medicine, Elsevier, vol. 74(9), pages 1426-1434.
    39. Case, Anne C. & Rosen, Harvey S. & Hines, James Jr., 1993. "Budget spillovers and fiscal policy interdependence : Evidence from the states," Journal of Public Economics, Elsevier, vol. 52(3), pages 285-307, October.
    40. Isen, Adam, 2014. "Do local government fiscal spillovers exist? Evidence from counties, municipalities, and school districts," Journal of Public Economics, Elsevier, vol. 110(C), pages 57-73.
    41. Brueckner, Jan K., 2000. "A Tiebout/tax-competition model," Journal of Public Economics, Elsevier, vol. 77(2), pages 285-306, August.
    42. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
    43. Mattos, Enlinson & Santos, Pedro, 2018. "Correcting the population of Brazilian municipalities using the Jackknife," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 38(1), May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Castro, Marcelo Araújo & Mattos, Enlinson & Patriota, Fernanda, 2016. "Spatial spillovers and political coordination in public health provision," Textos para discussão 417, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    2. Lucie Gadenne, 2017. "Tax Me, but Spend Wisely? Sources of Public Finance and Government Accountability," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 274-314, January.
    3. Kantorowicz, Jarosław, 2017. "Electoral systems and fiscal policy outcomes: Evidence from Poland," European Journal of Political Economy, Elsevier, vol. 47(C), pages 36-60.
    4. Köppl–Turyna, Monika & Pitlik, Hans, 2018. "Do equalization payments affect subnational borrowing? Evidence from regression discontinuity," European Journal of Political Economy, Elsevier, vol. 53(C), pages 84-108.
    5. Ricardo Dahis & Christiane Szerman, 2023. "Decentralizing Development: Evidence from Government Splits," Monash Economics Working Papers 2023-18, Monash University, Department of Economics.
    6. Bellofatto, Antonio Andrés & Besfamille, Martín, 2021. "Tax decentralization notwithstanding regional disparities," Journal of Urban Economics, Elsevier, vol. 123(C).
    7. Dahis, Ricardo & Szerman, Christiane, 2024. "Decentralizing Development: Evidence from Government Splits," IZA Discussion Papers 16761, Institute of Labor Economics (IZA).
    8. Frank M. Fossen & Lukas Mergele & Nicolas Pardo, 2017. "Fueling fiscal interactions: commodity price shocks and local government spending in Colombia," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 24(4), pages 616-651, August.
    9. Wang, Jian & Wu, Qun & Yan, Siqi & Guo, Guancheng & Peng, Shangui, 2020. "China’s local governments breaking the land use planning quota: A strategic interaction perspective," Land Use Policy, Elsevier, vol. 92(C).
    10. Sebastian Langer, 2019. "Expenditure interactions between municipalities and the role of agglomeration forces: a spatial analysis for North Rhine-Westphalia," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 62(3), pages 497-527, June.
    11. De Witte, Kristof & Geys, Benny & Schönhage, Nanna Lauritz, 2018. "Strategic public policy around population thresholds," Journal of Urban Economics, Elsevier, vol. 106(C), pages 46-58.
    12. Ricardo Dahis & Christiane Szerman, 2024. "Decentralizing Development: Evidence from Government Splits," CESifo Working Paper Series 10927, CESifo.
    13. Tidiane Ly, 2018. "Sub-metropolitan tax competition with household and capital mobility," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(5), pages 1129-1169, October.
    14. Brueckner, Jan K. & Saavedra, Luz A., 2001. "Do Local Governments Engage in Strategic Property-Tax Competition?," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(2), pages 203-230, June.
    15. Luz Amparo Saavedra, 2000. "Do Local Governments Engage in Strategic Property- Tax competition?," Borradores de Economia 139, Banco de la Republica de Colombia.
    16. Gaëtan Nicodème, 2006. "Corporate tax competition and coordination in the European Union: What do we know? Where do we stand?," European Economy - Economic Papers 2008 - 2015 250, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    17. Lyytikäinen, Teemu, 2012. "Tax competition among local governments: Evidence from a property tax reform in Finland," Journal of Public Economics, Elsevier, vol. 96(7-8), pages 584-595.
    18. Reingewertz, Yaniv, 2014. "Fiscal Decentralization - a Survey of the Empirical Literature," MPRA Paper 59889, University Library of Munich, Germany.
    19. Mauricio Villamizar‐Villegas & Freddy A. Pinzon‐Puerto & Maria Alejandra Ruiz‐Sanchez, 2022. "A comprehensive history of regression discontinuity designs: An empirical survey of the last 60 years," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1130-1178, September.
    20. Luigi Marattin & Tommaso Nannicini & Francesco Porcelli, 2022. "Revenue vs expenditure based fiscal consolidation: the pass-through from federal cuts to local taxes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(4), pages 834-872, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:30:y:2021:i:10:p:2323-2344. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.