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Perspectives on Health Decentralization and Interjurisdictional Competition among Local Governments in the Philippines

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  • Llanto, Gilberto M.
  • Kelekar, Uma

Abstract

It has only been in the recent years that developing countries are increasingly decentralizing the provision of health care to their local governments. This paper explores some key issues related to health decentralization in the Philippines identified in literature and in course of interviews with country officials working in the health care area. Issues of planning and budgeting of health plans, revenue and expenditure assignments in a decentralized health system are discussed. In addition, issues specific to the determinants of local government health spending are closely examined. One of the key questions closely examined is whether there are any incentives for local governments to compete through spending on health in a decentralized system. The question of spatial competition is addressed through an empirical analysis that attempts to test the presence of horizontal and vertical fiscal interactions among local governments in the Philippines using local government health expenditures data. While there is a consistent positive interaction among municipalities in health spending, the interaction of municipalities with provinces is positive but weakly significant. The positive fiscal interaction among local governments is explained as a result of potential competition for health care inputs.

Suggested Citation

  • Llanto, Gilberto M. & Kelekar, Uma, 2013. "Perspectives on Health Decentralization and Interjurisdictional Competition among Local Governments in the Philippines," Discussion Papers DP 2013-20, Philippine Institute for Development Studies.
  • Handle: RePEc:phd:dpaper:dp_2013-20
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    References listed on IDEAS

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    1. Bewley, Truman F, 1981. "A Critique of Tiebout's Theory of Local Public Expenditures," Econometrica, Econometric Society, vol. 49(3), pages 713-740, May.
    2. Rebecca J. Campbell, 2004. "Leviathan and Fiscal Illusion in Local Government Overlapping Jurisdictions," Public Choice, Springer, vol. 120(3_4), pages 301-329, September.
    3. Khaleghian, Peyvand, 2003. "Decentralization and public services : the case of immunization," Policy Research Working Paper Series 2989, The World Bank.
    4. Hans-Werner Sinn, 2004. "The New Systems Competition," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 5(1), pages 23-38, February.
    5. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    6. Aronsson, Thomas & Lundberg, Johan & Wikstrom, Magnus, 2000. "The impact of regional public expenditures on the local decision to spend," Regional Science and Urban Economics, Elsevier, vol. 30(2), pages 185-202, March.
    7. Emilie Caldeira & Martial Foucault & Grégoire Rota-Graziosi, 2010. "Decentralisation in Africa and Fiscal Competition Evidence from Benin," CIRANO Working Papers 2010s-35, CIRANO.
    8. Turnbull, Geoffrey K & Djoundourian, Salpie S, 1993. "Overlapping Jurisdictions: Substitutes or Complements?," Public Choice, Springer, vol. 75(3), pages 231-245, March.
    9. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
    10. Starrett, David A, 1980. "Measuring Externalities and Second Best Distortions in the Theory of Local Public Goods," Econometrica, Econometric Society, vol. 48(3), pages 627-642, April.
    11. Revelli, Federico, 2003. "Reaction or interaction? Spatial process identification in multi-tiered government structures," Journal of Urban Economics, Elsevier, vol. 53(1), pages 29-53, January.
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    More about this item

    Keywords

    Philippines; local health care; health decentralization; fiscal competition; horizontal fiscal interaction; vertical fiscal interaction; Local Government Code of 1991;

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