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Fiscal Decentralization, Chinese Style: Good for Health Outcomes?

Author

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  • Uchimura, Hiroko
  • Jutting, Johannes

Abstract

This study analyzes the effect of fiscal decentralization on health outcomes in China using a panel data set with nationwide county-level data. We find that counties in more fiscal decentralized provinces have lower infant mortality rates compared to those counties in which the provincial government retains the main spending authority, if certain conditions are met. Spending responsibilities at the local level need to be matched with county government's own fiscal capacity. For those local governments that have only limited revenues, their ability to spend on local public goods such as health care depends crucially upon intergovernmental transfers. The findings of this study thereby support the common assertion that fiscal decentralization can indeed lead to more efficient production of local public goods, but also highlights the necessary conditions to make this happen.

Suggested Citation

  • Uchimura, Hiroko & Jutting, Johannes, 2007. "Fiscal Decentralization, Chinese Style: Good for Health Outcomes?," IDE Discussion Papers 111, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper111
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    File URL: https://ir.ide.go.jp/record/38056/files/IDP000111_001.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Brock, Gregory & Jin, Yinghua & Zeng, Tong, 2015. "Fiscal decentralization and China's regional infant mortality," Journal of Policy Modeling, Elsevier, vol. 37(2), pages 175-188.

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    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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