Does Fiscal Discipline towards Sub-national Governments Affect Citizens' Well-being? Evidence on Health
This paper aims at assessing the impact of fiscal discipline towards sub-national governments on citizens' well-being. We model fiscal discipline by considering the expectations of deficit bailouts by Central Government, and focus on a particular dimension of well-being, namely health outcomes at the regional level. We study then how bailout expectations affect the expenditure for health care policies carried out by Regional Governments: in the presence of opportunistic behaviours by local governments - induced by soft budget constraints - bailout expectations should affect only spending inefficiency, and should not have any real effects on citizens' health. To investigate this issue, we model the efficient use of public resources for health care delivery as an input requirement frontier, and assess the effects of bailout expectations on both the structural component of health spending and its deviations from the best practice. The evidence from a sample of 15 Italian Regions observed from 1993 to 2006 highlights 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:||Apr 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Corso Unione Sovietica, 218/bis - 10134 TORINO|
Phone: +39 011 670.6129
Fax: +39 011 670.6062
Web page: http://www.biblioecon.unito.it/biblioservizi/
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.:
- 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.
- 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.
- 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.
- 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.
- 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).
- 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.
- 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.
- 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.
- 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.
- 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.
- Lancaster, Tony, 2000. "The incidental parameter problem since 1948," Journal of Econometrics, Elsevier, vol. 95(2), pages 391-413, April.
- Afonso, António & Schuknecht, Ludger & Tanzi, Vito, 2003.
"Public sector efficiency: an international comparison,"
Working Paper Series
0242, European Central Bank.
- António Afonso & Ludger Schuknecht & Vito Tanzi, 2005. "Public sector efficiency: An international comparison," Public Choice, Springer, vol. 123(3), pages 321-347, June.
- Bordignon, Massimo & Turati, Gilberto, 2009. "Bailing out expectations and public health expenditure," Journal of Health Economics, Elsevier, vol. 28(2), pages 305-321, March.
- 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.
- János Kornai, 2009.
"The soft budget constraint syndrome in the hospital sector,"
International Journal of Health Economics and Management,
Springer, vol. 9(2), pages 117-135, June.
- 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.
- 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.
- 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.
- Bordignon, Massimo & Brusco, Sandro, 2001.
"Optimal secession rules,"
European Economic Review,
Elsevier, vol. 45(10), pages 1811-1834, December.
- 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.
- 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.
- 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, 2002. "The regional impact of health care expenditure: the case of Italy," Applied Economics, Taylor & Francis Journals, vol. 34(14), pages 1829-1836.
- 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.
- 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.
- 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.
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:tur:wpaper:12. 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: (Simone Pellegrino)
If references are entirely missing, you can add them using this form.