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Health Spending and Decentralization in Indonesia

Author

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  • Kruse, Ioana
  • Pradhan, Menno
  • Sparrow, Robert

Abstract

Using a panel dataset of 320 Indonesian districts we examine the impact of district budgets on public health spending, utilization patters in the public and private sector, and private health spending in the four years after decentralization. We exploit the panel structure of the data and the fact that district budgets are largely driven by central government transfers to determine causal patterns. We find that the elasticity of public health spending with respect to district budgets is around 0.9 with a higher elasticity for development spending than for routine spending. District splits reduce public health spending. We find a positive effect of public district health spending on public sector utilization, with the strongest effects in the poorest two quintiles. We find no significant effects on private sector utilization and out of pocket health expenditures.

Suggested Citation

  • Kruse, Ioana & Pradhan, Menno & Sparrow, Robert, 2009. "Health Spending and Decentralization in Indonesia," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 33, Verein für Socialpolitik, Research Committee Development Economics.
  • Handle: RePEc:zbw:gdec09:33
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    File URL: https://www.econstor.eu/bitstream/10419/39952/1/33_sparrow.pdf
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    References listed on IDEAS

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    1. Julie L. Hotchkiss, 2005. "Do Husbands and Wives Pool Their Resources?: Further Evidence," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
    2. Gerdtham, Ulf-G. & Jonsson, Bengt, 2000. "International comparisons of health expenditure: Theory, data and econometric analysis," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 1, pages 11-53 Elsevier.
    3. Santiago Lago-Peñas, 2008. "Local Governments' Asymmetric Reactions to Grants," Public Finance Review, , vol. 36(2), pages 219-242, March.
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    Cited by:

    1. Karima Saleh, 2012. "World Bank study : A Health Sector in Transition to Universal Coverage in Ghana," World Bank Other Operational Studies 2728, The World Bank.
    2. Bernard F. Couttolenc, 2012. "Decentralization and Governance in the Ghana Health Sector," World Bank Publications, The World Bank, number 9376.

    More about this item

    Keywords

    public spending; health; decentralization;

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