Does fiscal discipline towards sub-national governments affect citizens’ well-being? evidence on health
This paper aims at assessing the impact on citizens’ well-being of fiscal discipline imposed by Central Government to sub-national governments. Since health care policies involve strategic interactions between different layers of governments in many different countries, we focus on a particular dimension of well-being, namely citizens’ health. We model fiscal discipline by considering sub-national governments expectations of future deficit bailouts from the Central Government. We then study how these bailout expectations affect the expenditure for health care policies carried out by decentralized governments. To investigate this issue, we separate efficient health spending from inefficiencies by estimating an input requirement frontier. This allow us to assess the effects of bailout expectations on both the structural component of health expenditure and its deviations from the ‘best practice’. The evidence from the 15 Italian Ordinary Statute Regions (observed from 1993 to 2006) points out that bailout expectations do not significantly influence the position of the frontier, thus do not affect citizens’ health. However, they appear to exert a remarkable impact on excess spending.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 93 403 46 46
Fax: 93 403 98 32
Web page: http://www.ieb.ub.edu
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bordignon, Massimo & Turati, Gilberto, 2009. "Bailing out expectations and public health expenditure," Journal of Health Economics, Elsevier, vol. 28(2), pages 305-321, March.
- Luca Crivelli & Massimo Filippini & Ilaria Mosca, 2006. "Federalism and regional health care expenditures: an empirical analysis for the Swiss cantons," Health Economics, John Wiley & Sons, Ltd., vol. 15(5), pages 535-541.
- Meena Seshamani & Alastair Gray, 2004. "Ageing and health-care expenditure: the red herring argument revisited," Health Economics, John Wiley & Sons, Ltd., vol. 13(4), pages 303-314.
- António Afonso & Ludger Schuknecht & Vito Tanzi, 2005.
"Public sector efficiency: An international comparison,"
Springer, vol. 123(3), pages 321-347, June.
- Afonso, António & Schuknecht, Ludger & Tanzi, Vito, 2003. "Public sector efficiency: an international comparison," Working Paper Series 0242, European Central Bank.
- Francesco Porcelli, 2009. "Effects of fiscal decentralisation and electoral accountability efficiency evidence from the Italian health care sector," Working Papers 2009/29, Institut d'Economia de Barcelona (IEB).
- Dov Chernichovsky & Sara Markowitz, 2004. "Aging and aggregate costs of medical care: conceptual and policy issues," Health Economics, John Wiley & Sons, Ltd., vol. 13(6), pages 543-562.
- Retzlaff-Roberts, Donna & Chang, Cyril F. & Rubin, Rose M., 2004. "Technical efficiency in the use of health care resources: a comparison of OECD countries," Health Policy, Elsevier, vol. 69(1), pages 55-72, July.
- János Kornai, 2009.
"The soft budget constraint syndrome in the hospital sector,"
Society and Economy,
Akadémiai Kiadó, Hungary, vol. 31(1), pages 5-31, June.
- János Kornai, 2009. "The soft budget constraint syndrome in the hospital sector," International Journal of Health Care Finance and Economics, Springer, vol. 9(2), pages 117-135, June.
- Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-48, September.
- Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
- Subal Kumbhakar, 2010. "Efficiency and productivity of world health systems: where does your country stand?," Applied Economics, Taylor & Francis Journals, vol. 42(13), pages 1641-1659.
- Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
- Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June.
- Margherita Giannoni & Theodore Hitiris, . "The Regional Impact of Health Care Expenditure: the Case of Italy," Discussion Papers 99/20, Department of Economics, University of York.
- Arulampalam, Wiji & Dasgupta, Sugato & Dhillon, Amrita & Dutta, Bhaskar, 2008.
"Electoral Goals and Center-State Transfers: A Theoretical Model and Empirical Evidence from India,"
IZA Discussion Papers
3376, Institute for the Study of Labor (IZA).
- Arulampalam, Wiji & Dasgupta, Sugato & Dhillon, Amrita & Dutta, Bhaskar, 2009. "Electoral goals and center-state transfers: A theoretical model and empirical evidence from India," Journal of Development Economics, Elsevier, vol. 88(1), pages 103-119, January.
- Wiji Arulampalam & Sugato Dasgupta & Amrita Dhillon & Bhaskar Dutta, 2008. "Electoral goals and center-state transfers: A Theoretical model and empirical evidence from India," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-14, Indian Statistical Institute, New Delhi, India.
- Bordignon, Massimo & Brusco, Sandro, 1999.
"Optimal secession rules,"
ZEW Discussion Papers
99-51, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Willam Greene, 2005.
"Fixed and Random Effects in Stochastic Frontier Models,"
Journal of Productivity Analysis,
Springer, vol. 23(1), pages 7-32, 01.
- William Greene, 2002. "Fixed and Random Effects in Stochastic Frontier Models," Working Papers 02-16, New York University, Leonard N. Stern School of Business, Department of Economics.
- Capps, Cory & Dranove, David & Lindrooth, Richard C., 2010. "Hospital closure and economic efficiency," Journal of Health Economics, Elsevier, vol. 29(1), pages 87-109, January.
- Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-32.
- Lancaster, Tony, 2000. "The incidental parameter problem since 1948," Journal of Econometrics, Elsevier, vol. 95(2), pages 391-413, April.
- Peter Zweifel & Stefan Felder & Markus Meiers, 1999. "Ageing of population and health care expenditure: a red herring?," Health Economics, John Wiley & Sons, Ltd., vol. 8(6), pages 485-496.
- Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
- Martin Besfamille & Ben Lockwood, 2008. "Bailouts In Federations: Is A Hard Budget Constraint Always Best?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(2), pages 577-593, 05.
- Kumbhakar, Subal C & Hjalmarsson, Lennart, 1995. "Labour-Use Efficiency in Swedish Social Insurance Offices," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(1), pages 33-47, Jan.-Marc.
- Battese, George E. & Corra, Greg S., 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(03), December.
- Margherita Giannoni & Theodore Hitiris, 2002. "The regional impact of health care expenditure: the case of Italy," Applied Economics, Taylor & Francis Journals, vol. 34(14), pages 1829-1836.
When requesting a correction, please mention this item's handle: RePEc:ieb:wpaper:2011/1/doc2010-56. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.